What do your employees want?
My father taught me this about running a successful business: Make your people your #1 priority, and the rest will follow. -Scott Scherr, Founder of Ultimate Software
These days, companies are having to do more to stand out from the crowd and keep their employees happy. For example,
- Amazon recently announced they're testing a 30-hour workweek.
- Airbnb gives employees a $2,000 stipend annually to travel.
- Netflix recently began offering one year of parental leave to both salaried and hourly employees.
Looks like companies are on the right track:
- 57% of respondents in a recent survey said benefits and perks are among their top considerations when deciding whether to pursue a particular job over another
- 68% people say that salary and compensation is among their top considerations before accepting a job in 2016
Unhappy employees tend to have wandering eyes and look elsewhere for work. Employee turnover has a negative impact on employee morale, productivity, and in turn, company revenue. Needing to recruit and train a new employee requires additional staff time and money.
According to the Bureau of Labor Statistics, turnover is highest in industries such as trade and utilities, construction, retail, customer service, hospitality, and service.
A study by SHRM found that that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average
Other studies have predicted the cost is even more—that losing a salaried employee can cost as much as twice their annual salary, especially for a high-earner or executive-level employee.
- 16 percent of annual salary for high-turnover, low-paying jobs (earning under $30,000 a year). For example, the cost to replace a $10/hour retail employee would be $3,328.
- 20 percent of annual salary for midrange positions (earning $30,000 to $50,000 a year). For example, the cost to replace a $40k manager would be $8,000.
- Up to 213 percent of annual salary for highly educated executive positions. For example, the cost to replace a $100k CEO is $213,000.
The true cost of losing an employee is broken down by Josh Bersin of Bersin by Deloitte:
- The cost of hiring a new employee including the advertising, interviewing, screening, and hiring.
- Costs- cost of onboarding a new employee
- Lost productivity—it may take a new employee one to two years to reach the productivity of an existing employee.
- Lost engagement—other employees who see high turnover tend to disengage and lose productivity.
- Customer service and errors—for example new employees take longer and are often less adept at solving problems.
- Training cost—for example, over 2-3 years, a business invests an estimated 10-20% of an employee's salary or more in training
- Cultural impact—whenever someone leaves, are affected, morale is affected
The top 5 factors in attracting and retaining employees
- The top reason in the “benefits” category was Health Insurance
- Having a good work-life balance
- Opportunities for advancement or professional development
- Having a sense of purpose
- 50% of millennials would take a pay cut for work that matches their own values
- Millennials seeks to work for companies that are socially responsible and value a positive impact on society.
- Needing to be transparent in how they conduct business to gain the trust of their employees
Overall, appears that companies are moving towards making the lives of their employees easier, inside and outside of the workplace Although any employee would be happy to receive a raise, there are plenty of other ways to reward and engage your employees.