In the war for talent, companies are focused on workforce retention. This is for good reason: it’s a process of onboarding, activating, and developing talent over a period of time. The greatest employee lifetime value (ELTV) comes from finding the right people, incentivizing them to perform at high levels, and retaining their skills within the company.
Consider the diagram below from Maia Josebachvili, Head of People at Stripe. It visualizes the return on investment (ROI) of investing in talent as time goes on, where the ongoing management and development of talent leads to greater overall ROI. Over time, an organization is able to achieve greater output from its initial investment — but only if employees choose to stay.
Organizations will continue to face pressure to retain the most talented employees and increase overall employee lifetime value.
Here are four best practices enabling organizations to do so:
1. Employee onboarding.
The cost of hiring a new employee seems to rise every year, and it was most recently calculated to be about $4,000 per employee. This might not be such a burden for organizations if spread across a timeline of years. But considering the fact that as many as 3.5 million people in the U.S. voluntarily leave their jobs each month, those costs can really add up. Employee onboarding offers employers an important opportunity to reduce turnover at the early stages of employment and contribute to a higher employee lifetime value. When designed correctly, it can be a powerful touchpoint for establishing clarity, creating connection, and building culture — allowing employees to kick off their tenure with the resources and information they need to be successful.
2. Employee wellness.
Employee wellness programs support employees in pursuing better sleep, nutrition, and exercise habits, which in turn fosters happier, healthier employees. Such programs have become increasingly popular over the past decade, to the point that more than half of employers surveyed by SHRM offer well-being programs to their global employees. These employers saw several benefits associated with retention, including improved absenteeism (79%), attracting and retaining talent (78%), and maintaining or improving morale (76%). It’s interesting to note that wellness programs retain talent even when employees don’t use them.
3. Work-life balance.
As much as 87% of employees expect their employer to support them in balancing work and professional lives, an increasingly difficult feat as companies move employees home for remote work. Employers that create work environments where work-life balance is respected — welcoming clear boundaries between work and home, accepting flexible schedules, and carefully monitoring workloads for burnout — will benefit from higher levels of loyalty and retention in the long run.
4. Internal promotions and transfers.
In the context of employee lifetime value, turnover isn’t always a bad thing so long as it’s internal turnover. After all, the highest-performing employees are the ones who are engaged in their work and constantly investing in themselves. It’s only natural these employees would seek to rise up in your company every 3-5 years.
For more on this topic, download SyncHR by PrimePay’s eBook titled “Three Meaningful Ways the World of Work Is Changing – And How HCM Technology Is Pivoting to Support It.”
Building a team, building value
Building your workforce is not just a way to get the job done. It’s a way to build value for the long-term. Organizations that focus on increasing employee lifetime value will find that every investment in employee resources — from wellness to engagement to development, and beyond —becomes an investment back into the organization itself.
PrimePay can partner with you to offer support throughout the entire employee lifecycle.
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Disclaimer: Please note that this is not all-inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding the specific application of the information to your own plan.
Editor’s Note: This post was originally published to SyncHR by PrimePay’s blog and has been updated for freshness, accuracy, and comprehensiveness.