Even more important than recruiting trainees and skilled workers is keeping good staff in the company and keeping them happy. Employee retention is both a strategic and operational task – and not something that can be done once. The term “employer branding” is often used in connection with employee retention. Internal employer branding, which focuses on employee retention, creates the basis for external employer branding, which is important for employee recruitment. In the long term, only companies with happy employees will be successful on the market and will be able to stand up to the shortage of skilled workers.
5 tips for employee retention
There are many measures and incentive systems to keep employees in the company for as long as possible. They are all based on the realization that employees who are satisfied with their employer and job do not normally change jobs. As well-qualified and reliable specialists can almost choose their employer, employee retention measures are becoming increasingly important. In many cases, pay in line with collective agreements and a good working atmosphere will no longer be enough in the future.
Individualization and flexibilization in particular are making life increasingly difficult for small companies: while salary is very important for one employee because he has to pay off his property loan and feed his family, work-life balance is a top priority for another because he is single and has inherited well. Regardless of such individual requirements, there are also employee retention measures that every company should implement:
1st employee survey: How satisfied are employees?
Before taking “any” measures, you should first find out what employees currently like, what bothers them and how committed they are to the company. An employee survey is a good tool for this. In contrast to an appraisal interview, it is anonymous, which is why criticism from participants can sometimes be harsh. To ensure anonymity, it is advisable to conduct the employee survey in cooperation with an external partner or agency. An employee survey is only suitable for companies with more than ten employees so that no conclusions can be drawn about individual persons on the basis of the responses. Another important point is transparency. Unpleasant results should also be presented to employees and the management should take a stand on them. If all grievances are already known but the managers are not prepared to rectify them or work on them, an employee survey will do more harm than good.
2. appraisal interview: How can you make individual employees even happier?
Annual employee appraisals are a central component of personnel management. They offer both managers and employees the opportunity to talk about the things that get lost in everyday life. It is important that both sides are well prepared for employee appraisals and that they are conducted in a structured manner using guidelines. Both sides should therefore complete a questionnaire in advance. Employee appraisals are often divided into a) a review of the past year b) a joint analysis of the work situation (tasks, cooperation, satisfaction) c) a target agreement for the coming year and d) a discussion about future development opportunities. The appraisal interview should at least be recorded in the form of key points. This can also serve as a starting point for the next meeting.
3. financial incentives: what is there apart from the standard wage?
The role of salary in employee retention is assessed very differently in studies and depends, among other things, on the employee’s life situation, the expected salary increase in the event of a job change and the current salary level. Or metaphorically speaking: Someone who has to support a family and currently has an annual salary of 30,000 euros will be more willing to change jobs if they receive 5,000 euros more per year than a single person who already earns 50,000 euros.
Pay in line with collective agreements is increasingly becoming the minimum standard, meaning that employees will hardly accept any downward deviation. If payment is not in line with the collective agreement or if there is no collective agreement, so-called salary adjustment clauses can be included in the employment contract, according to which the salary increases by three percent annually, for example. This saves salary negotiations. Commissions and bonuses that are linked to the company’s profits, for example, can also be a good way of increasing employee loyalty. Psychologically, these have the advantage that they are seen as a genuine bonus and therefore promote motivation more than “automatic” salary adjustments. Gratuities such as vacation and Christmas bonuses are also widespread. Employee profit-sharing schemes, on the other hand, are rare in small companies, but have a high retention rate as the employees then own a small part of the company.
State-subsidized measures to optimize remuneration include company pension schemes, travel allowances, capital-forming benefits or the promotion of employee fitness as part of company health care.
4 Intangible incentives: How can you increase employee satisfaction without money?
The “home office” desired by many employees is only possible if the work does not have to be performed on site – and is often impossible to implement in the manufacturing industry. However, there are various other incentives that can be used to retain employees. First and foremost is personnel management, which has a significant influence on the corporate culture and working atmosphere. A patriarchal management style is out; employees want to be heard, included in decisions and valued. Independent work is also a valuable asset for many employees. Anonymous employee surveys are a good way to get an idea of the status quo (see point 1).
Companies not only do their employees a favor with further and advanced training, they also strengthen their innovative power. The more freedom employees are given in their choice of further training, the more it serves to motivate them. This also means that compulsory training is not an incentive. The often demanded flexibilization of working hours is difficult in many industries, but at the same time important for many employees. This dilemma cannot be resolved, but companies should – ideally together with their employees – consider what leeway exists. After all, the compatibility of family and career will remain an ongoing issue. This is not just about raising children, but also about caring for older family members.
5 Contractual options: How useful are legal measures?
Multi-year contracts are common in professional soccer, and yet many players change clubs beforehand. So what’s the point of contracts if the employee is ultimately the one with the most leverage anyway? At the very least, they make it more difficult to change clubs and protect the employer from losing the employee quickly – who only has a notice period of four weeks as standard. However, some clauses are legally tricky. For example, although the exclusion of ordinary termination has a high binding force for both parties, it may be invalid under certain circumstances. The same applies to multi-year notice periods. Non-competition clauses, according to which an employee may not switch to a competitor one year after leaving the company, for example, tend to be less problematic, although companies should also seek legal support when drawing up the employment contract.
