Why is employee retention critical for success?

Today’s job market is increasingly competitive and fast-moving. With this in mind, many companies need to understand why employees leave. Retention is important for the bottom line, and it’s essential for retaining top talent, too.

Credit union managers should learn the importance of employee retention and the beneficial strategies to improve their satisfaction.

Why Employee Retention Matters

The goal of employee retention is to keep the best employees around, which helps credit unions thrive. Strategic processes should be put in place to retain critical talent and mitigate employee turnover.

However, retention is one of the primary challenges for organizations and HR departments. Workers leave their jobs for plenty of reasons. While a certain degree of turnover is normal and expected, some employers are seeing major shifts in retention rates in today’s labor market.

Dubbed “The Great Resignation” in light of a record-breaking amount of people leaving their jobs in late 2021, this movement is connected to changing work norms due to the pandemic and high employment rates giving workers more leverage to look for higher salaries and benefits packages.

How does this affect organizations? Regardless of the situation, high turnover rates can lead to serious consequences for businesses. On average, it costs an organization six to nine months of an employee’s salary for replacement. Recruiting and training costs can reach over $30,000 for someone making $60,000 annually.

What Are the Leading Causes of High Turnover?

Before credit union managers can improve employee retention, they must understand why employees stay and what causes high turnover. According to Harvard Business Review, employees stay because of two factors — job satisfaction and company environment.

The exact causes of why employees leave can vary but often fall within the following categories:

• Personal reasons: It could have nothing to do with the employer and everything to do with relocations, family problems, health reasons and career change.
• Financial reasons: More pay and better benefits elsewhere are strong reasons for employees to leave their jobs.
• Work-life balance: Long hours, rigid work styles and location can cause credit union employees to seek more flexible opportunities.
• Lack of opportunities: Credit unions that lack workplace development, career advancements and opportunities are causes for divergency.
• Work relationship: Conflicts between managers, co-workers and company leadership cause individuals to leave the workplace.
• Employee incompetence: Hiring employees who lack competence can often fall back on poor hiring practices, which are entirely avoidable.

How Can Credit Unions Improve Employee Retention?

Credit unions can begin improving employee retention by preventing turnover. Typically, this starts by acquiring the right person for the role and other strategies.

1. Use Best Hiring Practices

As mentioned previously, hiring the right people is part of what it takes to achieve retention success. The best method to approach this is to define the job itself. Description requirements should include responsibilities, required skills and work environment to attract the appropriate candidates.

It’s always best to avoid lengthy hiring processes to prevent the candidate from going elsewhere. Furthermore, once the organization chooses a new hire, the orientation and onboarding process should make them feel welcome.

2. Create a Supportive Atmosphere

One of the keys to retaining more employees is creating a culture that values them. Businesses that establish a supportive work environment allow workers to flourish and perform better.

Part of the picture here is employer policies, letting individuals feel guided on a strong career path. Managers should provide adequate training, clear communication, and job perks and benefits. Health and wellness is also something credit union management should keep top of mind, as workplace policies evolve over the course of the pandemic.

However, another consideration is an overall strong team culture. This is an even more pertinent concern with the growth in remote work, as it can cause employees to feel more disconnected from each other. In one survey, 73% of respondents said they miss socializing with coworkers.

Creating opportunities to connect, even with hybrid teams, can do wonders for energizing and bonding team members. Management can encourage positive interactions and host optional socialization opportunities to help stave off feelings of isolation.

3. Invest in Proper Management

In a 2019 leadership study, researchers found that 32% of employees have considered leaving because of their manager. Meanwhile, 57% of workers left their job because of this very reason.

Companies need to invest in effective training for managers so employees can feel supported. Training also ensures managers can have tough conversations with employees — letting them know which skills they can improve upon in the job process.

An organization maintains overall success when managers are viable in supporting employees.

4. Recognize Employee Contributions

Making workers feel valued is critical for workplace success. One way of showing appreciation is by implementing recognition programs. However, many organizations lack company wide incentives.

Consider rewarding employees for their hard work. For example, a peer recognition program allows workers to nominate other team members or managers for an award.

5. Encourage Work-Life Balance

Work-life balance involves important factors such as flexible scheduling and remote work options. However, supporting these elements is of little importance if employees are expected to work all hours of the day.

Strive to check in with employees regularly to ensure they can handle their workloads. Moreover, organizations can reduce time crunch by eliminating unnecessary meetings and administrative tasks.

Incorporating Employee Retention Strategies

Employee retention improvement starts with hiring the right people. However, companies must regard retaining workers as a continuous process. Otherwise, they will feel the pressure to seek employment elsewhere.

Incorporating the strategies listed above will help employees feel valued and supported in their success. Once organizations achieve this goal, everyone will feel happier, more productive and loyal — a victory for all.