How to reward and keep top performers
Published by: Jose Ortiz
September 20, 2023 | Human Resources, Industry Supporters
Unemployment is at pre-pandemic levels, but one in four workers quit their jobs in the last year, according to CNBC. Retaining top talent requires more than maintaining the status quo from now on—identifying and rewarding your best performers is key.
Employee Turnover and Retention Rates
Before getting into the weeds, it’s important to first lay a bit of groundwork. Employers often use the terms “turnover rate” and “retention rate” interchangeably. While the two metrics are certainly related, they can tell two very different stories.
Simply put, retention is keeping employees, whereas turnover is losing them. To calculate retention, look at the percentage of employees that were present at the beginning, and end, of a given time period. Let’s consider a hypothetical department … there were10 employees at the beginning of the year, and midway through, one was replaced. At the end of the year, nine of the 10 employees were retained from the original group, thus giving us a 90 percent retention rate. Turnover rate is the ratio of hires to existing employees over a given time period. In the above scenario, the department replaced one of its 10 employees, for a turnover rate of 10 percent.
Keeping Your Top Talent
Understanding the how and why of your turnover and retention is important. That process can be difficult to implement.
The first step in retaining top talent and preventing turnover is to identify your best performers. This time-consuming process can be automated. Performance Pro expedites and organizes the process of performance management. Conversations with leadership should delve into specific character traits that will contribute to success. With streamlined workflows and reporting tools, your Human Resources department will be able to quickly and effectively identify your organization’s leading performers.
Identifying and tracking valuable workers is one thing; knowing how to compensate and reward that talent is another. What works in one region may not work elsewhere.
Compease takes the guesswork out of compensation. With built-in job evaluation and merit increase planning, Compease simplifies and speeds up the process of rewarding top performers.
It’s simple to see that when pay is too high, you’re overspending on human capital that’s under-producing return on investment. It may seem like a cold and mechanical way of viewing the situation, but when executive management reviews the balance sheet, it’s what overpayment boils down to.
Simply put, organized compensation management will help you retain the right talent. It’s why many organizations enlist the help of salary reports and third-party compensation services. This can be a worthwhile investment if you’re confident in the acquired data. Keep in mind that good decisions made with bad information produce the same outcome as bad decisions made with no insight whatsoever. If you’re going to leverage the help of an outside expert, make sure that they’re experts in your industry, and have a wide array of data from which to pull.
A Combined Effort
At the end of the day, your company is more than walls, windows, desks, and computers. Especially in service-oriented organizations such as credit unions, human capital is what separates success from failure. Employees want to feel valued, that what they do matters, and that they’re getting a fair deal. If your organization can deliver, you’ll have a much easier time attracting and retaining the right people.
HR professionals need access to consistently accurate market data to ensure that positional salary ranges are spot on. Furthermore, fair market pay ranges are shown to increase employee engagement, reduce turnover, and increase retention. It takes time and effort on the front end, but a systematic approach to structured compensation simplifies multiple HR processes, saving time and money in the long term.
With Performance Pro and Compease working together, your organization will be able to spot top talent and properly compensate them without any guesswork or frustration. While you won’t ever totally eliminate turnover, you can make it more predictable and improve retention rates of top-performing employees.
Attend a complimentary webinar on Oct. 24 to learn more about how to deploy skills-based recruiting and optimize employee performance. Register here.
Contact Jose Ortiz for questions or assistance.