How to Increase Employee Retention

Employee retention is a key challenge for many organizations, especially in a competitive market where talent is scarce. High turnover rates can have negative impacts on productivity, morale, customer satisfaction, and profitability. Therefore, it is essential for managers to understand what motivates their employees and how to create a work environment that fosters loyalty and engagement.

Using Maslow's hierarchy to improve retention.

One useful framework to understand employee motivation is Maslow's hierarchy of needs, a psychological theory that proposes that human beings have five basic needs that must be satisfied to achieve their full potential. These needs are:

• Physiological: The need for food, water, shelter, and other basic necessities of life.

• Safety: The need for security, stability, protection, and freedom from fear or harm.

• Belonging: The need for social interaction, affection, acceptance, and belonging to a group.

• Esteem: The need for recognition, respect, achievement, and self-confidence.

• Self-actualization: The need for personal growth, creativity, fulfillment, and realization of one's potential.

According to Maslow, these needs are arranged in a hierarchy, meaning that the lower-level needs must be met before the higher-level needs can be pursued.

For example, if an employee is stressed because they are worried about their ability to pay their rent, it can have a negative impact on their ability to focus on work. Therefore, managers can unlock their employee's potential by helping them move up the hierarchy of needs.

Here are some practical ways to apply Maslow's hierarchy of needs to employee retention:

1) Provide a compensation plan that provides for physiological needs.

Employees need to feel that their basic needs are being taken care of while working for your company. As an employer, you can improve employee retention by ensuring your entry-level roles provide compensation packages that allow your employees to take care of their basic needs.

Turnover at entry-level roles tends to be high, as employees jump from employer to employer in search of making enough money to pay off debt, cover rent or mortgage expenses, food, clothing, and other basic living expenses. If basic needs are not met, employees will not be motivated or loyal, creating more retention risk.

Therefore, managers need to monitor the compensation packages of their competitors, along with the typical living expenses within their region, and ensure they are providing fair compensation. They should offer benefits such as health insurance, retirement plans, education reimbursement, and paid leave when financially possible. The money spent supporting the financial health of your workforce will ensure their physiological needs are met, which will reduce the risk of employee turnover.

2) Create a safe work environment.

Employees need to feel safe and secure in their work environment, both physically and psychologically. This means that managers should ensure that the workplace is free from hazards, accidents, violence, harassment, discrimination, and other threats.

Unsafe work conditions and toxic workplaces lead to low morale, higher levels of absenteeism, and elevated turnover rates. Failure to create a safe work environment can drive up labor expenses because employees will require greater compensation in exchange for the physical and psychological risks they take by working for your company.

Managers should establish clear policies and procedures for dealing with any issues or conflicts that may arise and communicate them effectively to the employees. Furthermore, managers should foster a culture of trust and transparency, where employees feel comfortable expressing their opinions, concerns, and feedback without fear of retaliation or punishment.

3) Establish a sense of belonging.

Employees need to feel that they are part of a team or a community where they can interact with others who share their values and goals. Organizations must be clear on their mission and values and establish best practices, rituals, and routines that attract, develop, and retain employees that align with the organization's purpose.

Managers play an important role in building a sense of community. They must be

• Selective when bringing on new talent

• Quick to address culture-damaging behaviors

• Skillful in resolving disputes

• Willing to remove individuals who do not align with the culture

Through their leadership, managers can stimulate the collaborations and teamwork necessary to build a strong sense of community within the organization.

4) Give work that builds employees' self-esteem.

Employees need to feel that they are valued and respected for their work and that they can grow and develop their skills and abilities. This means managers should assign challenging and meaningful work to their employees and provide them with clear expectations and feedback.

Managers should also offer training and development programs for their employees and support them in pursuing their career goals.

As employees move up the hierarchy of needs, opportunities to gain status, recognition, power, and influence become more important. Leaders must be intentional in providing employees with opportunities to expand their responsibilities and acknowledge their contributions.

5) Assist employees in pursuing their dream.

Employees need to feel that they are fulfilling their potential and achieving their personal aspirations. This means that managers should understand the interests and passions of their employees and help align them with the organization's vision and values.

Managers should also encourage creativity and innovation among their employees and allow them to experiment with new ideas and approaches.

Novelty, engagement, and retention go hand in hand. To retain employees at the top of the hierarchy, it is vital to provide them with the latitude to keep work fresh, exciting, and engaging while staying within the overall mission and vision of the organization.

Summary

By applying Maslow's hierarchy of needs to employee retention, managers can create a work environment that satisfies the diverse needs of their employees at different levels. This will increase employee satisfaction and loyalty and enhance employee performance and productivity. Ultimately, this will benefit both the organization and the employee. By identifying which stage your employees is on the hierarchy and identifying ways to satisfy their current need, you will increase their loyalty and decrease the risk of turnover.

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Thank you for reading this blog

I am a father, husband, executive coach, and former retail executive. My coaching expertise comes from 21 years of leading operation, sales, and marketing teams. I understand what it is like to feel stuck, undervalued, and underappreciated.

I also know what it takes to invest in professional development, climb the corporate ladder, and find fulfillment at work.

Your career path is a scavenger hunt. Each opportunity prepares you for the next. Allow me the opportunity to help you clarify your path and accelerate your professional development.

Talk with Dorian

Have Feedback Send me a note at

Email: dcunion@yourpathexecutivesolutions.com

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How to Take a Stress-Free Vacation.

What would happen if you had to be away from your business for a month? This is a question that every business leader should ask themselves. As a business consultant, I use this question to help business owners understand the quality of processes, procedures, and infrastructure that they have in place. When there are gaps in their infrastructure, I work with them on

Establish redundancy in key tasks.

Ensure processes and procedures are written.

Delegate before your need to.

Reinforce a culture of accountability.

The importance of infrastructure

When an organization relies heavily on its leader to drive day-to-day activity, any interruption in the leader’s ability to work and provide direction has the potential to derail execution. I remember working with a business owner that resisted developing employees until he was in a car accident that left him unable to walk for 3 months.

Fortunately for the business owner, he was part of a franchise system. The Franchisor provided him with additional support to keep his business running until employees in the store could be trained sufficiently to run the store. I always remember thinking that this business owner would have likely lost everything had he not been part of a system that was able to support him in his time of need.

Most independent business owners do not have the luxury of having external business partners that can help them during times of need. For this reason, it is immensely important for small business owners to build enough infrastructure within their businesses to continue running, with or without them.

Establish redundancy in key tasks.

The first step to improving the infrastructure of your business is to ensure that each task within your organization has more than one person that can complete the task. By training more than one person to do tasks like payroll, ordering items, making deposits, and other mission-critical tasks, the business can continue to prosper if the manager or owner is on vacation.

Ensure processes and procedures are written.

The second step is to define the processes and procedures essential for your business's effective operation.

When employees are trained properly and understand why and when tasks need to be completed, they are more likely to complete tasks unprompted. The time you take to define how and when tasks are to be completed will help to establish habits and routines that will keep your organization moving like clockwork even when you are not present.

Delegate before your need to.

Step three is to develop the competency of your team through delegation and feedback. In anticipation of the need for your to have time off, it is imperative that you give your employees the opportunity to develop new skills. People learn best by doing, and you can build the competency of your team by allowing them to take on increasingly complex tasks and providing them with feedback to help them grow.

Reinforce a culture of accountability.

Step four requires you to invest time in ensuring you have the right people on the team and that they are bought into your mission. When your employees work inside your business as if they owned it, they are more likely to step up when needed. This starts with hiring people based on character and potential, investing in their development, making them feel valued, and holding them to high standards. When you can influence your employees to hold themselves accountable, it reduces the need for supervision and management.

Summary

You work hard so that you can enjoy the fruits of your labor. Prioritizing infrastructure development opens up the opportunity for your to take time off of work without having to worry if the important tasks are being completed. Investing time in

• Establishing task redundancy

• Ensuring processes are written

• Delegating before your need to

• Reinforcing a culture of accountability

allows you to take time off without having to stress about your business. It also provides an extra layer of protection against the uncertainty that life brings us all.

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Thank you for reading this blog

Dorian Cunion is an Executive Coach and Business Consultant with Your Path Coaching and Consulting. He is a former retail executive with over 20 years of experience in the retail industry. He is a Co-Active coach who focuses on helping professionals, and small business owners overcome insecurities, knowledge gaps, and lack of direction. He does this by assisting clients to tap into their values, recognize their strengths, and develop actionable strategies for growth.

Have you been trying to improve your career or business on your own but are not seeing success as fast as you desire?

Book a free discovery call to discuss your goals and how I can help you accelerate.

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Have Feedback Send me a note at

Email: dcunion@yourpathexecutivesolutions.com

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Invest in Low-Wage Workers If You Want to Grow Your Business.

Designed by Taina Cunion

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Your Path Coaching and Consulted is committed to helping Small Business Owners attract, develop and retain employees. If you are looking to improve your people management strategy, visit our website. Or click this button to schedule a meeting

Start building your ideal culture

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Low-wage Workers Make Up a Significant Portion of the Labor Force

More than 40% of US labor force contains low-wage workers (Harvard Business)

Attracting and Retaining Employees Can be a Challenge

Companies facing the hardships of understaffing turn towards short-term incentives to fill in low-wage roles, such as sign-on bonuses or slight wage increases, yet why does turnover continue?

Employers' Beliefs Versus Survey Data

Common narrative regards workers as “fickle” people who constantly change jobs but the reality is that low-wage workers would rather stay with the companies that employ them.

• Harvard Business Study surveys shows 51% of low-wage employees had remained at their company for over four years

• 62% say that a promotion or higher pay would motivate them to stay

• 9% say they would like to stay if the employer offered them more skills training

• 6% say they would like to stay if the employer offered them more responsibility

• 22% agreed with the statement, “Even if my company doesn’t offer me higher pay, skills training, and more responsibility, I would prefer to stay at my current company”

• Changing jobs causes a disruption in a person’s life, which may not be a viable option depending on their financial situation.

  • No state offers a minimum wage that is in line with the living wage (CNBC)

  • 181,891 low-wage workers studied in 2012 found 60% of them remained stuck in such positions five years later (Harvard Business)

  • Americans who are employed in long-term low-wage work tend to be Black or Hispanic, are more likely to be women, and have less than 12 years of education, the researchers found (CBS News)

• Low-wage workers will stay at jobs longer if they have easy transportation access

• But when people feel trapped, it has rippling effects on the business

  • Low retention

  • High absenteeism

  • Low morale

  • Low productivity

• As temporary employees go in and out, more pressure is placed on long-time employees who stay. Eventually, they may burn out taking on extra responsibilities while management struggles with staffing

• Low-wage workers are thought of as easily replaceable, but there is a cost to constantly recruiting and training people

  • “At most companies with which Good Jobs Institute has worked, employers are pouring the equivalent of 10 to 25% of their labor budget on replacement costs—the costs to recruit, train, and reach baseline productivity, only to start all over again when employees leave.”

  • Senior living, call centers, warehouses, retail stores, and restaurants have to replace their entire frontline workforce annually, with more than 100% employee turnover (TIME)

Programs that are working

Sam’s Club- reduced hourly workers’ turnover by 25%, productivity increased by 16%, customer loyalty increased by 7%, and sales grew by nearly 15%.

Quest Diagnostics- reduced hourly turnover by more than 50%- At Quest, overall costs decreased by $2 million, $1.3 million of which came from ideas from the reps

Mud Bay- Mud Bay reduced turnover by 35%, 12% higher sales per labor hour, and 25% higher sales per square foot (compared to the 9% industry average at the time)

Eligible employees, after 90 days, can enroll in Disney Aspire, which provides full tuition payment for a high school diploma, degree, or vocational skill

• Of 14,000 hourly employees enrolled in Disney Aspire, 50% are working on a bachelor’s or master’s degree

  • 3,500 have graduated since it started in 2018

  • 2,800 graduates and students have been promoted internally

    • Of those enrolled in the program

      • 50% are people of color

      • 60% are women

The Path to Prosperity

If employees were set up for success from the beginning with full training, a livable wage, and support options for upward mobility, morale, and productivity would go up, and employees would be more likely to stay and grow within organizations.

Ensure Benefits are known

• 33% reported they were unaware of any opportunity to progress in their organization

• Only 55% of workers reported they’d ever had a supervisor or mentor who helped them succeed

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Your Path Coaching and Consulted is committed to helping Small Business Owners attract, develop and retain employees. If you are looking to improve your people management strategy, visit our website. Or click this button to schedule a meeting

Start building your ideal culture