Certain industries come with inherent turnover challenges and associated costs—take the hospitality industry as an example. Despite sincere efforts to keep employees excited and happy about coming to work, turnover in the hospitality industry is at an all-time high—a whopping 70 percent on average, with turnover in the banking, retail, healthcare, customer service, transportation, and advertising industries not far behind.
Turnover not only has adverse effects on company morale and the overall culture, but it's also extremely costly, ranging from 25 percent to 250 percent of the annual salary per exiting employee. With so many places to start, from employee engagement programs, which remain ambiguous at best for many companies, to perks and spiffs, it’s easy to get overwhelmed and throw money and time at the problem without realizing real results. But believe it or not, you can actually make a big impact on the bottom-line with the right focus and program in place.
Lack of appreciation and recognition is one big reason people choose to stay, or leave, organizations.
With a concerted effort to focus squarely on employee retention as a starting place, one of our customers in the transportation industry cut their annual turnover by 143 drivers. At $5,000 a pop in direct costs to replace each driver, they saved $715,000 in turnover costs in less than one year, not to mention the boosts in morale and culture they received on top of this. With more drivers staying on board and realizing the benefits of their culture, this company can now expand their focus from retention to engagement and much more.
To retain employees in this industry, we deconstructed what it was that employees were in need of, and many times lacked due to the pace of the job. Rewards and perks were one component of the need, but it extended far beyond this into regular communication and feedback, a better connection with their manager, and greater visibility into all the great things happening across the business. Below we outline how this large logistics company implemented a simple approach to hit retention directly and drive engagement and culture throughout.
A powerful and oftentimes unused tool for all managers is to recognize employees more often. I'm talking a pat on the back, a high-five, a mention in an all-hands, or, a social recognition post that's visible to everyone in the company. Our research found that while managers believe they recognize their employees, a much smaller percentage of employees feel that their boss appreciates their hard work. And a lack of appreciation and recognition is one big reason people choose to stay, or leave, organizations. Pay attention the next time someone does something big or small to keep things moving in the right direction. Recognize them, show appreciation for their work, and not only will you feel great, but you'll also likely see a repeat of the desired behaviors and a boost in productivity.
Employee rewards that are linked to recognition go a long way toward making work meaningful. Rewards that improve your employees’ quality of life outside of work, while enhancing their sense of place at work are proven to be most successful to ensure your staff stays engaged when it matters most. Here are a few ways to increase employee engagement and retention in high-turnover industries.
Enhance your Employees’ Leisure Time
Southern California brewery and restaurant chain Karl Strauss publicly recognizes and gives micro-bonuses to employees when they participate in wellness-related activities. About 2,700 miles east in New York City, Birch Coffee uses quality-of-life rewards like gift cards and high-end coffee equipment to boost employee morale after long shifts serving coffee to many others. Other meaningful rewards I've seen include gift cards for a massage, cab fare for a late closing shift ride home, or a holiday shift off. Turning the tables with small but meaningful rewards can be the boost employees need to perform at their best and reduce turnover.
Inspire Continued Learning and Education
Long-term careers in the hospitality industry are uncommon as many employees see their jobs as a way to moonlight or as a temporary source of income while they pursue a degree. For other industries like banking or retail, continued education could be the key to building and encouraging talent within a single company.
A recent case study revealed that Texas-based grocery chain H-E-B uses educational rewards to inspire up-and-coming professionals to join its company by fostering continued learning and professional development. H-E-B’s reward program offers tuition reimbursement and leadership seminars and, as a result, employee retention has been boosted across the board. Entry-level employees feel more loyal to the company, and ambitious individuals see a clear career path at the company.
Give On-the-Job Recognition to Boost Morale
Restaurant workers understand the need to perform well under pressure. In the midst of their crazy, consumer-focused work environment, their satisfaction in the workplace is equally important.
A chain of Dunkin’ Donuts stores implemented a Behavior BonusTM within their overall recognition and rewards system, rewarding employees for punctuality, shift attendance, and upsells. Employees can immediately redeem these points for reward encouraging ongoing engagement during shifts.
The key to on-the-job recognition and reward strategy is to identify behaviors you’d like to see in your employees, and then call them out, early and often and many times publically, when adoption of these behaviors is evident. Whether formalized through a recognition and rewards software, or done informally, a habit of expressing employee appreciation can help your management with these common, on-the-job asks while keeping the entire staff feeling happy and rewarded.