Defined: Employee Relations and How it Affects Retention
Focusing on strategies to evaluate and improve employee relations can help boost company culture, reduce turnover, and help the overall wellbeing of your organization. According to Gallup’s State of the Workplace, only 15% of employees strongly agree that their organization’s leadership makes them enthusiastic about the future. If employees aren’t looking forward to the future at the organization because of poor relationships with leadership, they likely won’t stay there. What does employee relations mean and how can organizations relate it to their overall retention strategy?
Defined: What is Employee Relations?
Employee relations refers to initiatives set forth by a company to help relationships between the employees and their managers. Efforts usually focus on treating all employees fairly and equally with respect and appreciation, thus promoting commitment among employees to their colleagues and their organization.
So, how do you know whether or not your organization needs to work on employee relations? High turnover rate is an obvious sign, but recognizing signs of employee disengagement can help improve relations before it’s too late. When an employee leaves your organization, more often than not there have been subtle red flags leading up to the event. According to Harvard Business Review, here are 5 signs to keep an eye out for:
- Decrease in work productivity
- Employees exhibiting a negative change in mental attitude
- Less focus on job-related matters
- Employees express dissatisfaction with current job
- Arriving to work late and leaving work early
Defined: What is Employee Retention?
Employee retention is an organization’s ability to keep its employees. It’s usually represented as a percentage that is calculated on an annual basis.
Employee retention rate is calculated by dividing the number of employees who have been in their position a year by the number of employees in the position a year ago. If a position was added during the year, it would be excluded from the calculation.
Tips for Improving Employee Relations
Improving employee relations isn’t something that changes overnight, but implementing the following actions can help:
- Invest in Onboarding and Orientation. According to SHRM, employee turnover can be as high as 50 percent in the first 18 months of employment. One way that employers can support employee relations and retention efforts is to develop a successful onboarding experience and job orientation for new hires, especially if you’re onboarding them remotely. Onboarding is the first interaction a new hire has with their new employer as an official employee. Much like a first impression with a new acquaintance, this first interaction lays the groundwork for how an employee perceives the company culture. If an employee has a negative onboarding experience, that negativity will likely color the new hire’s perception of the organization. Inversely, a positive onboarding experience has the potential to lay groundwork for strong employee relations.
- Communicate Regularly with 1-to-1 Meetings. Performance management conversations with employees have a huge impact on how satisfied, motivated, and productive their employees are. If avoided, you are risking the potential for decreased employee morale, the credibility of management, decreased retention, and your organization’s overall effectiveness. By implementing weekly 1-to-1 meetings, managers can offer constructive coaching, stay updated on an employee’s performance, and cover compliance concerns on a regular basis. Weekly 1-to-1 meetings are especially important for connecting with your teams and gaining insight into the wellbeing of your employees if your organization is still working remotely.
- Outline Priorities in a Culture Guide. It’s hard for employees to be loyal to an organization that’s lacking in a positive, clear company culture. Employers should start introducing cultural components and expectations as early as the new hire’s very first day through the Culture Guide.
- Recognize and Reward Your Team. Rewards and recognition can play an instrumental role in keeping employees engaged, motivated, and appreciated. Rewards are gifts and awards that are given to employees, whereas recognition is praising an employee and calling out their accomplishments, without a tangible transaction. A researcher found that in a work environment, efforts that demonstrate appreciation and affirmation can promote employee engagement and performance. Get into the habit of recognizing employees for a job well done or helping a colleague by posting on the company’s communication channels, through emails, or virtual meetings. Develop ways to reward employees when certain fixed goals are achieved, through monetary rewards, food and treats, or extra time off.
- Take an Honest Look at Turnover Rate. According to Gallup, “51% of employees are looking for a new job or watching for openings." Unfortunately for employers, workers aren't just watching for job openings, they're taking them. In fact, 91% of those surveyed indicated that, "the last time they switched jobs, they left their employer to do so." Turnover rate isn’t pleasant to think about, but it’s costly—not only monetarily but also in terms of company morale—and it’s necessary for employers to know exactly how often team members are leaving the company. This metric can be calculated using the following equation:
- Take the total number of employees who left your company within a predetermined time frame (i.e. all employees who left The ABC Company in 2020)
- Divide this sum by the average number of employees in that predetermined time frame
- Multiply this sum by 100 to calculate your turnover rate percentage
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