4 Smart Ways to Increase Employee Retention
Keeping your employees once you have them is a thorny problem in the staffing services industry. The difficulty in retaining temporary employees (i.e., external staff) gets most of the press, but there’s also high-turnover for permanent employees (i.e. internal staff).
So how do you keep your employees for the long haul? There are numerous strategies you can use:
1. Offer training.
Although training’s usually discussed in reference to temporary
employees, you should offer skills enhancement to all your workers.
Offering training to your temporary workers not only helps retain them
but also makes good business sense. After all, a more skilled worker
commands a higher pay rate. The higher the pay, the greater your profit.
As for your permanent employees, the staffing services industry
continues to change rapidly, and your staff members need to stay abreast
of these changes. New technology, new selling techniques, changes in
employment laws, and the huge impact of the internet are all compelling
reasons to keep permanent employees in the loop.
Following are some ways to provide your employees with training:
- Computerized training. You’ve invested in
computers and a variety of software packages; make sure they get good
use. Every employee can benefit from added computer skills.
- DVDs, audiotapes, books, articles and pamphlets.
The American Staffing Association offers a variety of all these to its
members. Your local library may also have useful resources.
- Mentoring programs. These can be informal (within your own company) or more formal (involving local businesses, universities or colleges).
- Outside seminars and classes. Community college
tuition is usually inexpensive. Look into seminars and classes your
employees could take. This training method could be offered as an
elected benefit (e.g., instead of vacation time) to either permanent or
2. Pay employees well.
In addition to offering training, staffing firms can retain good
employees by offering attractive pay rates and salaries. What you pay
your employees, both office and field staff, will depend on the
- Employee skills and experience. Salaries and pay
rates are consistent with the employee’s experience and the skill level
of the work performed. In “hot” segments of the industry, like
information technology or the professional sector, skilled workers are
receiving top dollar for their services.
- Supply and demand. Salaries rise in a labor
shortage, and you’ll pass on the cost of field staff to your clients by
adding a markup percentage. Therefore, high employee earnings are good
news for your staffing service. In addition, some locations have
particularly high demand for specific types of workers. This factor also
increases pay rates.
- Geographical location. The higher the cost of
living, the higher employees’ salaries will be. Generally, the Northeast
(especially New York City) and the West Coast (especially California)
have higher pay scales. Similarly, workers in cities earn more than
those in small towns.
- Worker seniority. A good employee who’s been with
your service for at least six months deserves to receive better pay than
someone you just hired. Also, senior staff often get first crack at
3. Provide attractive benefits.
The benefits you provide employees can go a long way toward helping
you retain workers. Benefits you should consider providing include the
- Health insurance. Most staffing services provide some kind of health insurance.
- Life insurance. This is one of the less common benefits, but it’s offered by some companies.
- Paid vacations and holidays. Almost all staffing
services offer this benefit, at least once the temporary employee’s
worked a certain number of hours or days.
- Tuition reimbursement. As training becomes
increasingly important, you may consider it worthwhile to pay for, or
contribute toward, your employees’ continuing education.
4. Offer a variety of bonuses and incentives.
The staffing industry is one that lends itself particularly well to a
merit-based pay system, especially for permanent employees. Many
staffing services offer permanent employees the chance to significantly
enhance their base pay rates via a variety of bonuses. Here are some
typical bonuses awarded in the industry:
- Acceptance bonus. If your service needs a worker for an especially hard-to-fill position offered by a valuable client, it may be reasonable to offer a bonus to the employee who takes the position. Depending on how important the client is — and how desperate you are — this bonus would be paid instead of, or in addition to, a higher hourly rate.
- Performance bonus. This incentive is common in the industry. This type of bonus could apply to both permanent and temporary employees, although it’s more frequently given to the former. It’s usually handled as a percentage of the base pay rate.
- Referral bonus. Most staffing services give bonuses to both permanent and temporary staff for the referral of qualified applicants.