Talent retention is more challenging than ever. These companies have figured out how to beat the odds.
Keeping top talent can feel like a never-ending battle, and it’s trickier than ever right now. The impacts of the Great Resignation continue to be felt, and recent layoffs are only adding to workers’ unease. According to LinkedIn’s 2023 Workplace Learning Report, 93 percent of companies continue to see employee retention as a key pain point.
One of the most common assumptions is that raising wages is the best solution to this problem. But it’s not the only, or even the most effective, answer.
“While salaries may have gotten more aggressive because of market demand and inflation, raises are a short-term solution for supporting employees during a downturn,” says Lynee Luque, chief people officer at San Francisco-based personal finance company NerdWallet. “Wage increases essentially only cover the cost of inflation, so founders need to focus on more comprehensive measures.”
Those “comprehensive measures” can mean many things. Here are just three tactics that companies with low turnover rates have identified to keep employees motivated, engaged, and ready for the long haul.
1. Use creative activities to build trust.
Steve Cody, founder of New York City-based public relations firm Peppercomm, says the company’s turnover rate was below 10 percent in both 2021 and 2022. According to the U.S. Bureau of Labor Statistics, the average turnover rate was 47.2 percent in 2021. Today, Peppercomm has 32 full-time employees.
Cody attributes Peppercomm’s low turnover rate to the standup comedy training he introduced to the company in 2010. Those trainings have certainly added an element of fun to the workplace. But Cody stresses that the real reason they have been so effective is that standup comedy has helped Peppercomm cultivate an environment in which listening is a priority. If employees know their voices will be heard, it goes a long way toward building and deepening trust, he says.
Cody adds that he recently implemented another team activity designed to enhance this culture of listening. “I guide my employees to take groups of three or four to lunch every other Thursday, and I meet with each of the groups,” he says. “When I’m with a small group, I let them know everything is off the record and will not be shared with HR.”
2. Promote community through employee-led events.
Bethany Mily is president of the Fresno, California-based workforce training firm Bitwise Industries, which landed on the 2022 Inc. Power Partner list. In 2022, the 556-employee company had an 8.2 percent turnover rate.
Mily says that Bitwise has kept turnover low by encouraging employees to organize and participate in community-oriented activities. “At every one of our offices, employees lead team activities that unite them in their interests and cultures–for example, weekly yoga sessions, community service, and Pride events,” says Mily. “Our team members know that they’re part of a bigger community and mission when they’re at work, so they can always bring their best selves to work and back home.”
3. Support working parents with flexible holiday time.
Flexibility is key to employee retention, especially for working parents, says Esi Seng, CEO of Southampton, New York-based dessert company Tate’s Bake Shop. Tate’s factory saw a 31 percent turnover rate in 2022, while the commercial team saw a turnover rate of just 11 percent. Tate’s has about 500 employees in its factory, and the commercial team includes approximately 100 people.
Tate’s designed its company holiday schedule around the concept of flexibility. Instead of offering many scattered one-day holidays, Tate’s extends the three-day weekends observed in honor of Memorial Day, Independence Day, and Labor Day to four-day weekends. Seng says these long weekends help ensure working parents are able to spend more time with their children and plan short trips.
Seng adds that less than 30 percent of U.S. factories offer Martin Luther King Day as a paid holiday, and that Tate’s will challenge the industry norm by offering every employee the day off starting next year.
This article was written by Xintian Tina Wang from Inc. and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to [email protected].
