Keep your A-team on board! Dive into these proven retention strategies in professional services and cultivate a workforce that thrives.
Due to factors like economic uncertainty, a shift to remote work, and early retirement, service-based companies have a new incredibly high turnover rate of 13.4%. Professional services like accounting, legal work, and marketing have chronically had lower retention rates, but the current state of the market has catalyzed a turnover spike. Employee turnover doesn’t have to be a casualty of recent shifts in professional services.
Improving retention may be an uphill battle, but there are retention strategies that companies are using to improve employee satisfaction and keep your star performers on your team, no matter the ups and downs. With the cost of turnover and the impact that high retention rates can have on a company’s bottom line, these strategies can have significant financial benefits.
Factors Contributing to Turnover Rates
Within the professional services industry, high turnover often stems from factors that impact employee satisfaction and commitment. Employee engagement, for example, is critical to both job satisfaction and profitability. However, one Gallup study shows that employee engagement decreased to 32% in 2022 due to a lack of clarity in expectations, little connection to the mission, and a shortage of growth opportunities and career advancement.
Poor support from inefficient management can exacerbate these issues by eroding team morale. Combined with a lack of work-life balance, employees also struggle with burnout, which can lead to pursuing other opportunities, early retirement, switching careers, or seeking out remote work.
Maintaining a competitive compensation and benefits package is crucial for retaining top performers. Market research should be conducted to ensure compensation offerings are within industry standards.
Poor retention also directly impacts your bottom line. Without an effective retention strategy, businesses deal with a loss of productivity, high employee replacement costs, and inconsistent company culture. These costs add up—but smart retention strategies can dramatically curtail these needless expenses.
High turnover rates can cost your business:
- Knowledge. When it comes to professional services, each employee holds specific knowledge about clients and projects. When turnover is high, you lose valuable insight into each project’s direction and client expectations.
- Productivity. When a team member departs, the remaining staff may struggle to realign and adapt to the change, slowing down workflows and hindering collaborative efforts. This can often lead to burnout as employees experience heightened job fatigue from the added stress.
- Customer Experience Quality.Clients depend on the expertise and commitment of your team. Beyond the day-to-day, multiple poor experiences can damage long-term relationships over time, which can lead to lost business opportunities.
Given the effects of turnover, bullet-proof retention strategies are critical for the professional services industry. Research indicates a correlation between high employee satisfaction and strong customer service performance; in fact, one three-year study by the Harvard Business Review found that employee tenure was directly linked to revenue and profit rates.
6 Long-Term Retention Strategies for Retaining Star Talent
A long-term plan for employee retention helps you keep top performers on your team. Let’s look at six retention strategies that are poised to keep your team together. When implemented correctly, these retention strategies help your employees understand how they add value and provide opportunities for advancement, reducing employee churn and associated expenses.
Prioritize Financial Compensation
At the end of the day, your employees are trading their skills and knowledge for money. Offering competitive compensation plans is a great way to attract and keep top performers. However, compensation doesn’t just refer to salary.
Benefits like PTO, uniquely crafted retirement plans, and health insurance offer stability and a positive work-life balance. To encourage employee retention, explore new financial compensation packages that offer a wealth of benefits to your employees. Whether it involves employer paid healthcare, a generous 401K match, or wellness days throughout the calendar year, it’s important to prioritize employee well-being in your compensation packages.
Offer Personalized Incentives
Personalized benefits create a sense of community within your company culture. Collaborate with your HR team to help curate incentives for individuals, some of which may include flexible work arrangements, childcare support, or counseling services. Incentives based on business objectives (e.g. productivity or revenue-based bonuses) can also offer an advantage to both the company and employee, improving results while also enhancing employee satisfaction.
HR reps can sit down with individual team members and talk through what elements of the employee benefits package appeal most to them.
Provide Consistent Mentorship
Though financial compensation is important for employee retention, it’s not everything. There are many other factors to consider that influence on employee satisfaction. Mentorship opportunities are another way to help employees feel empowered and valued. Employee advocacy is incredibly important for team morale. When you provide mentorship opportunities, individuals are encouraged to achieve more. This creates a sense of belonging, which makes employees more closely tied to their teams.
When it comes to generating a positive company culture, respect and community goes a long way in reducing turnover. Plus, a mentorship program can help employees cultivate new skills and become more effective team members. Mentorship is especially important during employee onboarding. About one third of employees leave their jobs within the first 90 days, making this time a potential breaking point for your retention rates. Implementing a mentorship program to support new hires is a proactive approach to your long-term onboarding strategy.
Nurture Autonomy and Agency Within the Team
When you provide more individual autonomy to your team members, you are trusting them to add value to the organization. This makes employees feel empowered and encourages them to think in new ways. With autonomy, individuals are empowered to unleash their creativity, and as a result, increase their productivity.
One classic example of employee autonomy is Google’s 20% Time initiative, in which they gave employees 20% of their workweek to dedicate to individual passion projects. Not only did this improve morale, but impressive innovations came out of these sessions (Gmail and Google Maps, for example). Their investment in employee autonomy has paid off exponentially.
Other ways to provide individual autonomy on a team include enabling personal time management, professional development opportunities, and open communication with management.
Invest in Career Growth and Development
People don’t like to feel stagnant; the human brain craves stimulation. By offering career growth and development opportunities, you can increase employee satisfaction and loyalty. Consider investing in your employees’ career development by offering training programs, skill-building initiatives, and mentor-guided growth plans. In addition to boosting morale, these efforts can lead to a highly skilled and committed workforce.
For your top-performing employees, career growth opportunities will look a bit different as they are likely already in a senior-level position. Stretch projects invite your advanced staff members to take on new challenges within their positions. With the right scaffolding, you can position your top performers to take on more leadership or analytical roles, letting them further develop their skills and gain recognition for the value they bring to your team.
Provide the Supportive Environment They Need
Improving employee satisfaction also means improving the quality of day-to-day work life. A healthy, positive working environment keeps employees motivated and productive, reduces stress, and improves communication and teamwork.
When employees feel proud of their workplace, they are more likely to represent your company positively—and less likely to leave. Encouraging a sustainable work-life balance, open communication channels, and mental health support are just a few examples of how a manager can foster a supportive workplace environment.
Build Retention Strategies That Reduce Costly Turnover
Highly skilled employees play a pivotal role in delivering exceptional service to your customers. The challenge lies in the delicate balance between a top-tier workforce and managing the associated high wages. By taking measures to improve employee satisfaction, you can reduce turnover rates—and thereby bolster productivity and your bottom line. Discover how a reliable financial partner can be the cornerstone of your success as your organization builds and implements a robust employee retention strategy while maintaining a strong balance sheet. Reach out to our team today.
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