How to Retain Employees without Using Money

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According to a Jobvite study, fully 51% of workers who currently have a job are actively looking for a new job, or are open to a new job if one were offered to them by another company.

This is troubling if you own a small business, or work as the hiring manager for one. Good employees are not cheap, and if you can’t afford to consistently raise salaries in this competitive talent market you may lose them to a competitor with a “better offer.”

Breaking A Piggy Bank

But jobs aren’t just about the money, and there are plenty of things you can do to keep your employees with your company that don’t involve kneejerk (and unsustainable) salary raises. Here are five of them.

1. Flexible hours

The Families and Work Institute’s report on workplace flexibility found that “more employees indicate that they are not very likely to look for a new job in the next year when their level of overall ­flexibility is high rather than when it is low.”

Giving employees flexible hours and the power to determine their schedule is an easy, no-cost benefit you can implement almost immediately. In fact, it may even help your bottom line directly, as Best Buy found that, after switching to a plan that allowed employees to set their own schedules so long as the work got done on time, they saw a 35% improvement in productivity.

Other, similar benefits you could consider are:

  • Work from home/telecommuting options
  • Full-time remote work opportunities
  • Getting rid of your formal vacation policy

2. Training/career growth opportunities

According to a Harris Interactive poll, 41% of workers with “poor” training options at their job plan to leave. This compares to just 12% of those who say their employer provides excellent training programs.

While an initial investment in a training program may seem hefty, it will quickly amortize over all of your employees. Additionally, there’s plenty of training software out there that can help you manage the process.

3. Recognition

Companies with employee recognition programs have a 23% lower turnover rate than those without them, according to a Globoforce survey. Things like employee of the month, and recognition for specific achievements can be hugely beneficial to company culture and an employee’s willingness to stick around.

Recognition can also be paired with small rewards like gift cards or additional vacation days to make it more substantial. Team recognition, for instance taking everybody out for dinner after hitting a milestone, can also be effective here.

4. Ownership and stock options

How do you get someone to care about your company as if it was their own? Make part of it their own! In 2005, IndyMac Bank found that stock awards increased their total employee retention across all employee types, from operations staff to management.

While not technically “free,” giving stock options won’t deplete your cash on hand, and can greatly improve your turnover. IndyMac found that they cut turnover among operations staff by 50%. You just have to decide if the opportunity cost is worth retaining great employees.

5. No layoffs

Employees are much more likely to jump ship after their company has laid off colleagues, according to a University of Colorado Boulder study. Job insecurity is one of the big reasons people voluntarily switch employment.

While some layoffs may be unavoidable if you’re in dire financial straits, consider being creative in avoiding them. For instance, Mosaic Wealth Management of Atlanta offers employees 10% of any savings they can identify within the business as a way to trim the fat.

Others?

Do you know other creative methods of inspiring employee loyalty and reducing turnover without breaking the bank? Add your suggestions below!

Looking for Talent Management software? Check out Capterra's list of the best Talent Management software solutions.

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JP Medved

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J.P. was formerly content director at Capterra.

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Hello JP,

Successful employees have all three of the following success predictors while unsuccessful employee lack one or two and usually it is Job Talent that they lack.
1. Competence
2. Cultural Fit
3. Job Talent 



Employers do a… 

A. great job of hiring competent employees. 

B. good job of hiring competent employees who fit the culture. 

C. poor job of hiring competent employees who fit the culture and who have a talent for the job. 


Identifying the talent required for each job seems to be missing from talent and management discussions. If we ignore any of the three criteria, our workforce will be less successful with higher turnover than if we do not ignore any of the three criteria.
1. Competence
2. Cultural Fit
3. Talent

There are many factors to consider when hiring and managing talent but first we need to define talent unless “hiring talent” means “hiring employees.” Everyone wants to hire for and manage talent but if we can’t answer the five questions below with specificity, we can’t hire or manage talent effectively.
1. How do we define talent?
2. How do we measure talent?
3. How do we know a candidate’s talent?
4. How do we know what talent is required for each job?
5. How do we match a candidate’s talent to the talent demanded by the job?

Most people cannot answer the five questions with specificity but the answers provide the framework for hiring successful employees and creating an engaged workforce.

Talent is not found in resumes or interviews or background checks or college transcripts.

Talent must be hired since it cannot be acquired or imparted after the hire.

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