How to Improve Employee Retention Through Performance Analysis

Dean Matthews
November 17 2022
Stories

These days, the competition for employees is tough—in fact, it’s so tight that jobs outnumber available workers by a 2-to-1 margin. HR professionals are feeling the pinch. 

In addition to a shortage of people, there is a skills gap now being felt by up to 82% of employers across different industries. 

Given this scenario, it’s now more important than ever to nurture and engage your existing talent pool so they remain loyal to your organization. 

This post will cover why employee retention matters, the barriers faced by organizations, and how to improve retention strategies.

Why is Employee Retention Important?


Employee retention is a critical aspect of talent management because it promotes the growth and scalability of an organization. Hiring is costly, especially considering the time and resources a company spends to onboard and train a new employee. In fact, losing talent is much more expensive than retaining it. 

More than the economic cost, losing an employee can also cause a shift within an organization,  decreasing employee morale. When an employee resigns, it can also mean that another team member loses a friend. This matters, because 50% of employees report having a stronger organizational connection if they have a best friend at work. 

So to thrive in this highly volatile economy, retaining talent should be paramount—but leaders need to look beyond simply increasing salaries.

What are the Barriers to Employee Retention?


Here are some challenges faced by organizations when it comes to retaining their talent:

Better Opportunities Elsewhere


Employees’ needs evolve, and it’s always a bitter pill for organizations to swallow if their employees choose to explore opportunities elsewhere. But it happens, especially if they’ve been with the company for several years and no longer feel like they have other growth opportunities to explore. 

One study found that employees who stay in their jobs for an extended time are less satisfied, while those who moved on to different companies are happier. 

Employees need to be valued and challenged. Noticing and respecting the skills and strengths of your employees in their performance reviews helps increase their level of job satisfaction and improves engagement and retention. 

Poor Employee Treatment


In today’s market, employees have the upper hand, so business leaders must consider the whole worker as a person. Workplace burnout can stem from poor employee treatment—even if it’s unintentional or benign. 

If employees aren’t happy with the workload, environment, or culture where they are, they can easily move on. Most—and especially the talented ones—can secure a job days after resigning. In comparison, a company can spend weeks to months trying to replace them. Not only does this disrupt operations, but it can also impact overall team morale. 

Lack of Company Direction


Employees will work for the benefit of your organization if they know what is expected of them. However, if the company operates without specific targets and goals, employees may be confused. They won’t know their roles and may struggle to identify what is being asked of them and what they contribute toward the success of the business. 

4 Ways to Analyze Performance and Improve Retention


Organizations can address these issues with the following performance analysis strategies:

1) Start at the Recruitment Stage


Retaining the employee means hiring the right talent at the onset—through clear goals and objectives, the HR team should know if the candidate is the right fit for the company and its culture. Avoiding bias is critical. One effective approach to curb this is by using artificial intelligence to analyze candidates. 

Onboarding is a critical process that can help ground the new hire in the culture and workflows of your workplace.

2) Track Employee Productivity


Assess employee performance through time tracking tools and measure output against the number of hours they’ve worked. This strategy allows you to determine each person’s current load, giving you an idea of the overall bandwidth of your employees. It can also help to surface employee preferences, strengths, and weaknesses, allowing you to assign tasks to the most suited individuals. As a result, they’re not overburdened and become happier and more connected employees.

3) Set Attainable Goals to Motivate Employees


Each employee must have goals to keep them motivated. Setting and meeting small goals helps build focus, and knowing they are meeting expectations leads to feelings of satisfaction. Tracking employee progress and performance means managers will know how people and projects are coming along and can be sure to recognize staff achievements. This promotes engagement and assures staff they are a valued part of the team.

4) Have a Clear Mission Statement


Employees are more connected when they understand what the company stands for, so it’s imperative that business leaders develop a clear mission statement and communicate it to the team. Staff should be aware of what the company is trying to achieve, and how that will be accomplished.

Be sure your mission statement is authentic and make it part of a flexible and supportive company culture.

Performance Analysis Drives Employee Retention


People leaving your organization can have a huge impact. It can affect team morale, impact productivity, and put a big dent in the organizational budget. Strong retention strategies, such as those supported by solid performance analysis, can greatly affect business success. These strategies must be present from the recruitment stage until new hires become established employees in the company. 

Don’t let your efforts go to waste. Employees who choose to leave often take more than what you initially invested in them. Invest in the right systems, technology, and processes—but more importantly, invest in your people.


Author Bio

Dean Mathews is the founder and CEO of OnTheClock, an employee time tracking app that helps over 15,000 companies all around the world track time. 

Dean has over 20 years of experience designing and developing business apps. He views software development as a form of art. If the artist creates a masterpiece, many people’s lives are touched and changed for the better. 

When he is not perfecting time tracking, Dean enjoys expanding his faith, spending time with family and friends, and finding ways to make the world just a little better.

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