Improving Employee Retention in a Strong Economy
Anybody who follows a business magazine on LinkedIn knows two things: unemployment is at its lowest in over fifteen years, and finding a new job can be accomplished quickly. Not only that, but countless trending blogs offer tips on time-saving work strategies, the consequences of poor workplace culture, and, a popular topic, ways to overcome workplace burnout. When so much online media consumption relates to tolerating work and finding the easiest ways to get through the day, it’s important to consider how employee engagement and retention can be boosted. Today, disengaged employees can find better careers, making it every company’s mission to be the best place to work.
Today’s economy is booming, and companies are aiming to increase pay. In 2016, over half of the US workforce claimed they were open to new job opportunities, with 44% actively looking for a job. Since then, average salary increases have steadily increased. In 2017, the average salary increase was 2.9%, and increased 0.01% in 2018. Granted, some budgets simply don’t allow for significant salaries increases, so how can companies improve employee retention? Believe it or not, salary is not the most important factor in either employee retention or engagement. A study by LinkedIn Corp. has found that 70% of professionals prefer a strong workplace culture over higher pay or rank within the company.
According to Aon, a professional services firm, 77% of employees believe that compensation should be a direct result of their performance. However, salary and benefits are only two factors of employee compensation. The employees surveyed also viewed their companies as lacking in employee recognition and engagement. Compensation is tricky, but many forget that a simple “thank you” could go a long way. Acknowledging a teammate’s contributions to the company affirms their value, and there are many ways beyond cash rewards to show genuine gratitude. In fact, non-cash rewards are more effective and leave a long-lasting impact on employees. Think of a non-cash reward as a trophy. It represents the company’s recognition of the employee’s achievements and, unlike cash, it can’t be spent on everyday expenses and quickly forgotten. Our blog The Science of Rewards and Recognition discusses the advantages of non-cash rewards in further detail.
To boost engagement and improve retention, a company needs to establish itself as one of the best places to work. A strong workplace culture contributes greatly to job satisfaction. Simply making recognition top of mind within the workplace could improve culture, but software exists to further encourage recognition and provide a system with which people could send and redeem rewards. At Next Level Performance we use Applaudit to send our peers e-ppreciations, company awards, nominations for awards, and more. The software also allows us to award points with which employees can purchase gift cards, event tickets, travel options, and merchandise items. Consistent recognition for achievements within the workplace results boosts engagement, creating a high return on investment. According to Gallup, improved engagement leads to 21% better business profitability. An engaged workplace that recognizes and rewards accomplishments has low employee turnover, high productivity, and a thriving culture. Pay is not essential to keeping people focused and productive, the work environment is.