Beyond the Paycheck: Why Employee Retention Is Your Business’ Best Investment

Employees are the heart and soul of any business. They are the ones who drive innovation, serve customers, and make things happen. Imagine a company without its employees—it would be like a car without an engine. Employees bring skills, knowledge, and creativity to the table, helping the business grow and thrive. They interact with customers, solve problems, and contribute ideas that can lead to success. Without motivated and skilled employees, even the best products or services would struggle to find their way to market.

That’s why investing in employees to retain them long-term is critical to the health of your business. Not only does it boost employee morale and productivity, but it also builds a loyal workforce that is committed to the company’s mission and goals. Generally, employees are the most valuable asset of a business because they are the ones who turn vision into reality and drive the company forward.

But as each employee is different, it is crucial to focus on business strategies that offer a variety of “perks” that keep your employees engaged and satisfied in the workplace.

Why Do Employees Leave?

Let’s face it: even though employees are a valuable asset to any business or company, not many organizations are in touch with their needs. When there’s a disconnect between understanding or addressing their needs, dissatisfaction and disengagement among employees happens. Let’s break down some of the reasons why it happens.

Lack of Communication

Communication breakdowns are a common reason for the disconnect between employers and employees. When there’s a failure to communicate effectively, employees may feel undervalued or ignored. They may have concerns or suggestions that go unheard, leading to frustration and disengagement.

Limited Employee Engagement

Business owners or managers may not actively engage with their employees, leading to a lack of understanding of their needs. Without regular check-ins, feedback sessions, or opportunities for open dialogue, owners can miss crucial insights into what motivates their workforce and what improvements could be made to enhance job satisfaction.

Absence of Recognition and Appreciation

Employees thrive on recognition and appreciation for their hard work and contributions. When business owners fail to acknowledge employees’ efforts, it can breed resentment and a sense of unfulfillment. This lack of recognition can make employees feel undervalued and unappreciated, prompting them to seek validation elsewhere.

Limited Career Growth Opportunities

If employees perceive a lack of opportunities for career advancement within the organization, they may feel stagnant and unfulfilled. Without clear pathways for professional development and growth, employees may seek opportunities elsewhere that offer better prospects for advancement and skill enhancement.

Neglecting Work-Life Balance

A photo of a coffee, pen, and stack of index card with the word “work life balance” written on it

Business owners who prioritize productivity over their employees’ well-being may inadvertently contribute to a disconnect. When employees feel overworked or stressed due to long hours or unreasonable expectations, it can lead to burnout and dissatisfaction. Without a healthy work-life balance, employees may feel compelled to leave in search of better conditions elsewhere.

And if none of these factors are addressed – businesses risk losing valuable talent and experiencing higher turnover rates. Without enacting strategies that will maintain your workforce, sooner or later, your business is also bound to fail.

Why Does Employee Retention Matter?

Employee retention is the ability of a company to keep its employees satisfied and motivated, encouraging them to stay with the organization for an extended period. It involves strategies and practices aimed at preventing employees from leaving their jobs voluntarily.

It’s about time your business starts thinking about these strategies because:

It Affects the Company’s Cost Savings

High turnover rates can incur significant financial costs for businesses, mainly because recruiting, onboarding, and training new employees takes time and money. By implementing employee retention strategies, businesses can reduce turnover rates and these associated costs, helping them save money in the long run.

It Helps Maintain Productivity and Efficiency

When employees leave, it disrupts workflow and productivity. New hires may take time to get up to speed, leading to temporary dips in productivity. By retaining experienced and skilled employees, businesses can maintain continuity in operations, ensuring smooth workflow and efficient performance.

It Fosters a Positive Work Environment

Employee turnover can negatively impact company culture and morale. Constantly seeing colleagues leave can demotivate remaining employees and create a sense of instability. But when you start implementing retention strategies, it fosters a positive work environment, which inevitably creates more satisfied and loyal employees.

What Happens if I Do Nothing About It?

Is there a cost to employers who don’t make a valiant effort to maintain their staff? We think there is. In most industries, there is a cost (most times significant) to training your employees to be able to complete the job at hand.

Often, it takes a higher-paid staff or part of management to assist in the training process. This investment in the employee is then recuperated in the months or years that the employee is able to perform their duties to the level that the business requires.

Here’s a closer look at other things that can happen to your business if you do nothing:

  • You may lose your good workers
  • Your customers may be impacted due to less skilled workers
  • Your suppliers may also be affected (if new workers order products, pay invoices, etc.)
  • You may not be able to produce as much product, or your product may be of lesser quality
  • Workplace morale may suffer
  • Investors or creditors may become wary

Strategies to Improve Employee Retention

A photo of a work team joining hands

It’s normal to occasionally lose touch with your employees, especially when there are a ton of things involved with running your business or organization. So, what can you do? It is truly endless what businesses can do to retain staff. Some options are more expensive but are indeed a “benefit” to the employee. Examples of these are:

    • Setting up a group retirement savings plan or employer contributions to one
    • Offering a group health plan to your workers
    • Offering a health spending account to your workers
    • Putting in place a profit-sharing agreement
    • Offering paid sick time
    • Increasing pay
    • Increasing paid vacation time

There are also options that are less expensive and relate more to morale in the workplace:

    • Arranging meetings with staff to determine if they are content in the workplace
      • Allowing ample time for employees to give you the reasons they aren’t
    • Offer to pay for coursework that can advance their career
    • Offer an allowance for their vehicle, cell phone, or parking

Employers should be cautious about how they approach workplace morale. “Pizza Friday” is a great example of how employers may not be addressing a workplace morale issue properly. In many instances, low workplace morale gets worse after a “3rd Friday of each month pizza hour” policy is instituted. Just think of the pizza party that Michael from The Office always throws.

Retain Talent Today and Thrive Tomorrow

Employees are the lifeblood of any business. So, as early as possible, make it a priority to implement policies that retain your staff so that the unfortunate event of having talented employees or senior staff members leave doesn’t occur frequently.

On top of that, be sure to constantly have your finger on the pulse of the industry you’re in. This gives you a general idea of what competing businesses offer their staff members – giving you the advantage of being a step ahead of them and preventing your staff members from being recruited by someone else.

If you need help working on strategies that will help retain your employees, speak to your bookkeeper or payroll specialist, who can suggest innovative ways to implement some of our suggestions above.

Or, for even better traction, consider outsourcing your bookkeeping and payroll needs to experts like eGO Bookkeeping. We can work with you to ensure your employees are satisfied, increase your productive workflow, and help you set up employee benefits. Book a call with us, and let’s strategize how we can help make your business processes more efficient for you!