Effective strategies to retain employees in a competitive labor market.

Employee turnover comes with hidden costs. For example, increased product failures and lower customer service satisfaction often result while teams scramble with fewer members or new employees get up to speed. One way to protect your business from the hidden costs of high employee turnover is to adopt strategies to improve employee retention. Here are three areas to consider.

Evaluate compensation

One of the most common reasons people switch jobs is for higher pay. Research wages and salaries at competitors as well as other companies where your employees might jump ship. If your pay isn’t competitive, offer raises and incentives.

Stand out with benefits

Another key reason people change jobs is for better benefits. There are numerous ways to stand out as an employer with good benefits, from health insurance to health savings accounts, and from childcare to retirement plans. Poll your workers to see which items are most important to them. Then find ways to invest in the benefits they care about most.

Build a culture of trust and respect

Trust and respect are more difficult to measure than pay and benefits but that doesn’t mean they’re not valuable.

Foster respect by recognizing accomplishments and being transparent about failure.

Find out how people like to be recognized for their good work. For some, this is in public while others thrive with praise received in private. Get to know your employees as individuals and honor their preferences.

Build trust by demonstrating your trust in employees first. Start small and build up to larger things. As employees take on more responsibility, make sure their compensation keeps pace. 

Employee retention is never one-and-done. Plan to revisit each strategy periodically and adjust as your business grows and the economy changes.

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