Numerous studies have shown that the costs of attracting and recruiting new talent is far higher than the cost of retaining the talent you already have. In addition to some of the usual expenses, such as paying recruiters, posting ads on online job boards and taking the time to interview potential candidates, losing a key employee can have a profound effect on morale. And a decline in your firm's morale could exacerbate future turnover, creating a vicious cycle that undercuts the business.
If you want to avoid that vicious cycle and the associated costs, you need to create a retention plan, one designed to keep your key players where they are and keep your top performers happy.
One of the most important parts of your retention plan is holding your managers responsible for their own turnover rate. Every department head with supervisory responsibilities should have a target turnover rate established, and that rate and the consequences of exceeding it should be clearly spelled out in the plan.
It is just as important to set an overall turnover rate for the company as a whole. The departmental goals you develop should feed into that overall goal. But before you can implement your strategy, you first need to know where you stand.
Assess Your Current Turnover Rate
It's easy to calculate the retention and turnover rates for your practice. The retention rate is simply the number of employees who stay with the firm, divided by the total number of workers. The turnover rate is just the opposite, the number of employees who left the firm in the previous month. The monthly turnover rate includes both employees who left the firm voluntarily and the ones who were terminated.
The Value of Exit Interviews
Developing an effective retention plan means digging deep into the data, setting goals for your departmental managers and understanding the reasons why employees are leaving the firm in the first place. The exit interview can be a great tool for that last one, and if your practice is not using them, you should start right away.
Every member of your supervisory staff should be trained to conduct effective exit interviews, and the results of those surveys should be carefully recorded and retained to help guide retention policies.
Use Employee Surveys
Knowing what causes employees to leave is important, but understanding why they choose to stay can be just as valuable. Conducting periodic employee surveys is one way to gather this information, and your retention plan should include sample surveys that managers can use to query their direct reports.
The surveys should be short and to the point. Employees are more likely to answer questions (and more of them) if they are limited in scope. They are also more likely to answer questions if they know their answers will be confidential. The survey should be a blind instrument, with no personal information to tie it back to the respondent. If you want honest answers, you need to protect your workers' anonymity.
Keeping Your Top Performers
Knowing what your employees value is a vital part of employee retention. Without that, even the best-laid plan will miss the mark.
The exact retention strategies you use will depend on the results of your exit interviews, employee surveys and other actions you take. It is obvious that workers in the financial services industry respond to increases in their compensation, but you can reward your top performers even when the budget is tight.
Strategic bonus payments can help you reward your best employees without going over the overall compensation budget you have set, while non-monetary rewards like flexible work hours, telecommuting opportunities and tuition reimbursement can all give your top performers substantial reasons to stay.
As a business owner, it is up to you to attract and retain the most qualified workers. Doing so is even more critical for financial services professionals. Whether your firm is relatively new and still in its initial growth phase, or has been around for decades, developing a comprehensive retention plan can help you lower your turnover rate, keep your top performers and lower the cost of doing business.
If you need help developing a plan for your practice, working with an experienced consultant can be a smart move. Plus, a service like Truelytics can further arm you with the tools to optimize the performance of your practice, lower your costs, thus ensuring that your employees and key performers are operating at peak efficiency and serving their clients to the best of their abilities.
You May Also Be Interested In Reading: Top 10 Considerations When Creating A Bonus Plan