Employee Retention in a Booming Economy

Looking at traditional metrics, the U.S. economy is booming. The unemployment rate has reached record lows, consumer confidence is rising, and the confidence of U.S. manufacturers has reached a 20-year high.

While it is a great time for business, it is also a great time for your employees. The healthy U.S. economy means that your employees likely have more options to leave your company for other opportunities. They’re likely receiving calls from headhunters and may be discussing job offers with their significant other.

Some of your rock-star employees may be contemplating a significant offer as you read this.

It’s a disconcerting feeling.

Retaining Employees

As managers, we can’t stay idle. While not exclusive, managers should consider taking the following steps to increase the odds of retaining their best employees.

First, make your employees feel welcome and respected. Your employees—especially your star employees—don’t want to work in an environment full of negativity and criticism. They want to work in a safe, inclusive environment where managers note their accomplishments and make them feel like they are an integral part of the team.

While company culture cannot be fixed overnight, managers can take steps today to make employees feel more welcome and respected. Managers can think about things like delivering weekly compliments to employees who went above and beyond or taking employees out for drinks at happy hour. By taking action and delivering genuine praise to deserving employees, managers prove to employees that they sincerely appreciate their contributions and that all employees are members of a close-knit team. By making employees feel appreciated, it becomes harder and harder for them to leave.

Next, managers can retain more employees by offering rewards—both financial and non-financial. Undoubtedly, all of your employees want to be paid more, yet you may not be able to give raises or bonuses to everyone.

However, there may come a time where a star employee may express his or her desire to leave if they don’t receive a raise. As a manager, you will have to weigh the pros and cons and decide the best route forward.

But if an employee hasn’t demanded a raise or bonus, you can build goodwill by taking preemptive action. For example, you can give star employees a discretionary bonus for excellent performance in the past year. Employees will undoubtedly appreciate the surprise and will intuitively feel that management watches, and appreciates, their contributions to the company.

If your company cannot afford to give raises or bonuses, you can always consider non-financial rewards. Things like flexible work schedules or creating a pet-friendly work environment can go a long way in showing that you appreciate your employees’ work. While you may have to get creative, non-financial rewards may have just as large of an impact as financial rewards.

So don’t underestimate the impact of financial and non-financial rewards. Employees certainly appreciate them and will be more likely to stay should they feel that they are being sufficiently rewarded for their work.

Finally, managers can increase the chances of retaining their best employees by promoting employee advancement within the company. Your star employees are likely hard working, ambitious people who don’t envision staying in the same position for the next couple of years.

It’s best for managers to tap into that drive and ambition by offering opportunities for employees to advance within the organization. If the employee knows that he or she can gain more responsibility, a higher title, and perhaps more money, he or she is more likely to stay.

Importantly, however, the employee must intuitively know that there is a chance at advancement. Simply having a company-defined career track isn’t enough. The employee must see his or her colleagues actually travel through that track and succeed at each level.

Assuming that such an example exists, those rising stars will feel less like they are at a dead end. They are more likely to be encouraged that they can build a real career in your organization and, thus, will be less likely to leave for other opportunities.

You Have The Power

As a manager, you have the power to inspire, reward, and mentor your employees. In a time of healthy macroeconomic conditions, this task is arguably even more important, as employees have more career options.

Ultimately, the best advice is to get started today. Undoubtedly, some of your employees are testing the waters, searching for new opportunities. It’s better to act now before it is too late.

Take a look at TrainingABC's wide selection of management training programs that will help your managers retain your best employees.