How can I encourage employee retention?

Frequent employee turnover can be expensive for a business. It costs time and money to recruit and train someone new, and productivity remains lower while a new employee gets up to speed. High turnover can also decrease employee morale and make it more difficult to build strong relationships with clients. Our Employment Law team discuss here several strategies you can use to retain your business’s best talent.

Restrictive covenants in employment contracts

The inclusion of restrictive covenants in your employment contracts limit your employees’ ability to go and work for a competitor. However, restrictive covenants always carry a risk that they will be considered unenforceable by the Courts, especially where the restrictive covenants are considered to be unreasonable.  Reasonableness looks at the activities that the covenants prevent, the duration of the covenants and the geographical area in which they apply.  To increase the likelihood that your restrictive covenants will be enforced by the Courts, you should ensure they go no further than necessary to protect a legitimate business interest such as trade secrets or good will.

However, while restrictive covenants may deter some employees from leaving, employees who are truly unhappy in their current position are unlikely to put up with it forever and may eventually leave. If they then take a job with a competitor in breach of their restrictive covenants you will have to decide whether it is worth the time and expense to bring a claim against them. Restrictive covenants are enforced by seeking an injunction to stop the employee breaching the covenant and damages to compensate you for any losses that flow from the breach.  This type of litigation is conducted in the High Court rather than the Employment Tribunal and can be both costly and time consuming.

While restrictive covenants may be useful, especially for employees with access to commercially sensitive information, it is also worth considering additional employee retention strategies.

Additional benefits

There are many additional benefits and perks you can offer your employees to make your business more attractive and show your employees that you value their hard work. Bonuses, commission plans, or share schemes are effective ways of rewarding and retaining high performing employees if your business can afford to offer them.

Offering enhanced maternity and paternity pay may help you foster goodwill and retain employees who are new parents or are planning to start a family. The enhanced pay could also be made conditional on them returning to work for a set period when their family leave ends.

Other benefits you may consider, depending of the needs and resources of your business, include:

• Company vehicles;
• Cycle to work scheme;
• Salary sacrifice pension scheme;
• Life assurance;
• Private medical insurance;
• Additional day annual leave for birthdays.

Flexible working arrangements

Allowing flexible working arrangements shows your employees that you care about their wellbeing and encourage a good work-life balance. During the pandemic, many employees enjoyed the comfort and flexibility of working from home, and in response many businesses are now implementing hybrid working arrangements. Where feasible, you should consider allowing employees to continue working from home for at least part of the week, and may also consider offering other arrangements such as flexible work hours to accommodate employees with young children or caring commitments.

Communication with your employees to increase retention

Strong communication networks can help you understand how your employees are feeling and learn about any problems as and when they develop. Regularly check in with your employees to see how they are doing and to ensure that they are not burned out or experiencing high levels of workplace stress. Soliciting employee feedback through surveys, one to one meetings, and exit interviews can also be very helpful in discovering ways your workplace can be improved. Make sure employees feel empowered to reach out to you or your management team to discuss any concerns, questions, or suggestions they may have. 

You should also ensure that you give regular feedback to employees on their performance and that their hard work is properly acknowledged and recognised. You could implement an employee recognition programme that rewards employees who go the extra mile, and encourages peer recognition.

Training and Development

Employees may be more likely to leave their current job if they feel there are limited opportunities for career advancement, or that their skills are not being fully utilised. Investing in training and professional development shows your employees that you value their contributions and are invested in their future with the company. There are several ways to support your employees’ professional development including:

• In-house skill building;
• Mentorship programs;
• Tuition assistance for business courses;
• Offering paid time off to attend industry events and workshops.

Investing in your employees’ continued education and training will also help you develop a talent-rich pool of individuals from which you can promote when vacancies arise. Include discussions with your employees of their future plans and career goals as part of your communication strategy.

If you would like to discuss how to you can introduce employee retention strategies in your workplace, or how we can support you in improving your communication, training needs or internal policies, contact our Employment Law team today on 023 8071 7717 or email employment@warnergoodman.co.uk.

To receive regular Employment Law updates from the team regarding recent tribunal cases and legislation updates, you can subscribe to our weekly Employment Law Newsletter by completing our subscription form or emailing us at events@warnergoodman.co.uk. 

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.