The Key to Employee Retention is Performance Management
As we head into 2022, HRO’s are continuing to guide small business clients through one of the most difficult employment markets in history. According to the U.S. Bureau of Labor, the number of job openings increased to 11.0 million in October while hiring decreased, indicating that the worker shortage is worsening and affecting employment growth and the overall economy.
Smart employers are thinking about how to keep the employees they have happier and more engaged in an effort to stem employee attrition. Taking measures to retain valued employees makes good business sense, because on average, it costs 6-9 months of an employee’s salary to replace them.
The key to increasing employee retention is proving to be effective performance management.
Let’s face it: Performance management has always been viewed as a necessary evil by employers and employees alike.
But new performance management techniques and programs can actually increase employee engagement and retention while providing clear benefits for employers, including increasing productivity, identifying top performers, and ensuring that company objectives and goals are aligned with company hiring, KPI’s and development planning.
Next Generation Performance Management
Employees choose to leave positions for many reasons, but oftentimes poor communication, unrealistic workloads, unclear expectations, lack of recognition or limited opportunities for advancement play a role in that choice. Today’s performance management systems provide more opportunities for supervisors and employees to identify issues and to come up with plans to address them before it’s too late.
Regular, consistent feedback
The practice of conducting traditional yearly performance reviews is over. Today, performance reviews are held year round through employee check-ins designed to encourage two-way communication between employees and managers to gauge progress and identify any issues that need resolution. The increased involvement ensures that employees are engaged, happy and working towards mutual goals.
Enhanced employee development
Good performance management practices help employers identify employee strengths and weaknesses and target areas for both training and development.
Identify top performers
Understanding who top performers are in an organization is key, and finding ways to reward and motivate them should be the goal of every employer.
Easy to use for both employees and managers
Performance management systems have come a long way from the paper-based systems of the past. Today, solutions are integrated with HR and payroll systems and facilitate two-way feedback from both the employee and the supervisor.
The HRO Value-Add
As a trusted advisor to your small business clients, guiding your clients to success is job #1, and in today’s tough employment market, offering a performance management solution and communicating its role in employee retention is key.
Thinking of offering performance management to your customers in 2022? Check out PrismHR’s integrated performance management offerings.