Retention. It’s an aspect of corporate culture (and overall company performance) that’s of the utmost importance and yet it seems that it doesn’t quite get the attention that it deserves. The reality is that an effective retention approach, as we’ll talk about here, goes a long way in ensuring that employees are highly motivated to contribute effectively to the company and work hard to help stimulate growth. Let’s be honest: nobody wants to work for a company where they feel underappreciated and unrecognized for what they do; this can lead to a skyrocketing turnover rate and often create a negative reputation for a company due to workplace hostility. As an example of an extreme case, the last thing you want is a New York Times’ exposé like this one, which detailed the effects of the “bruising” atmosphere of the Amazon headquarters in Seattle. (As a company, Amazon has the second-highest employee turnover rate of any FORTUNE 500 company).
Not yet convinced of the importance of retention? A survey by Glassdoor reveals that company perks, a key means of boosting retention, are a top consideration for nearly 60% of workers applying for jobs, and 80% of workers would rather receive new perks than a pay raise. A 2011 IES/Work Foundation Report states that a 10% increase in employee engagement by companies can increase annual profit by over $2,400 per employee, and a 1% rise in employee commitment can boost sales by up to 9%. These numbers are nothing to scoff at by any means.
But with average turnover rates of nearly 16%, retention is a primary concern faced by any company, and the lack of an effective approach for enhancing employee retention can have major repercussions on a business’ future success. It’s no secret that the process of making a new hire is difficult and expensive:
- It costs a company anywhere from 30-150% of an employee’s annual salary to replace lost headcount (the percentage increases moving from entry-level employees to senior employees).
- For executive employees, it can cost a company upwards of 400% of an employee’s annual salary.
So, hypothetically, even at the low end of replacement costs – 30% – it will cost a company upwards of $75,000 to replace five entry-level employees with salaries around $50,000. Aside from those costs, employees who leave a company often join its competitors, which can pose a series of risks with respect to protecting your company’s industry knowledge. In addition, from a productivity standpoint, it takes a while for a new individual in a company to align with and understand the corporate culture, policies, and values of the business. With risks like these, without question, any company should invest more energy in novel approaches, such as creative perks, to boost employee morale and increase its retention rate.
Not sure where to get started? For some inspiration, check out some of our favorite moments in retention. This list covers a series of truly unique ideas and perks that different companies from a variety of industries in the U.S. and Europe have come up with for their employees to ensure that these employees want to stick with them for the long haul. Then, after you’ve had some time to chew on these amazing ideas, read on for our how-to guide for replicating the same approach in your own company, no matter how large or small.
Presenting Our 20 Favorite Moments in Employee Retention (Alphabetical Order):
1. Airbnb (San Francisco, CA)
Quite possibly one of the coolest employee perks on this list: Airbnb employees are given an annual stipend of $2,000 to travel anywhere they want in the world and stay in an Airbnb.
2. Burton (Burlington, VT)
Burton employees are given the full Burton snowboarding experience while they work there; they get free season passes for nearby ski resorts and are granted “snow days” to use these passes after big periods of snowfall.
3. Clif Bar & Company (Emeryville, CA)
Clif encourages its employees to live in the organic, healthy style of the company. Employees have access to an on-site dance studio, gym, and rock climbing wall. They also receive 2 ½ hours of paid workout time every week.
4. Eventbrite (San Francisco, CA)
Employees at Eventbrite get a number of opportunities for team bonding, with company-sponsored outings like breakfasts, biking, and even visits to the local trampoline park. Employees also get a fitness and wellness stipend to help them stay in shape and feel their best.
5. Facebook (Menlo Park, CA)
New parents at Facebook need not fear; all employees with a newborn baby are provided with $4,000 in “Baby Cash.”
6. Genentech (South San Francisco, CA)
Genentech employees keep themselves entertained with company-provided discounts to many California amusement parks (shoutout to Disneyland and the Santa Cruz Beach Boardwalk) as well as complimentary on-site haircuts and weekly car washes.
7. GoDaddy (Scottsdale, AZ)
GoDaddy employees receive great perks to help improve their health. GoDaddy offers its employees healthy living coaching programs, health fairs, and flu shots, as well as adoption assistance for hopeful parents and tuition reimbursement for students.
8. Google (Mountain View, CA)
It’s no secret that Google, especially its Mountain View campus, treats their employees amazingly well and offers them a variety of interesting and cool perks to keep them motivated. Google offers free lunch and dinner to all employees every day of the week, but that’s not all: Google employees also enjoy complimentary car oil changes, car washes, massages, yoga, child care, and, of course, the legendary nap pods.
9. Grasshopper (Needham, MA)
Grasshopper, a platform that allows its users to use their cell phones as business lines, helps its employees get through the chilly Massachusetts winters by providing them with Uggs to keep their feet warm. It doesn’t stop there; Grasshopper employees also get wellness reimbursements, phone reimbursements, a full game room, half-day Fridays and “December hours”- shorter, more flexible hours during the holiday season.
10. Gymboree (San Francisco, CA)
The childlike spirit of Gymboree is embodied in its corporate culture; every Thursday, corporate employees are given a 20-minute “recess,” the purpose of which is solely for the employees to get outside and hang out with each other. Wednesdays at Gymboree are for “snacktime,” a 20-minute period where employees take a break to talk over company-provided snacks.
11. Netflix (Los Gatos, CA)
Employees at Netflix are given plenty of wiggle room; Netflix offers its employees unlimited vacation time, as well as unlimited maternity and paternity leave.
12. REI (Kent, WA)
REI really encourages its employees to live by the company mantra and get outdoors; employees are offered 2 “Yay Days” a year, which are paid days off for them to do their favorite outdoor activity.
13. SAS (Cary, NC)
SAS is a software suite that deals with advanced analytics and data management. The SAS campus boasts an on-site, 1-acre sustainable farm, which provides much of the food used in the company cafeterias. Children of employees also reap the benefits of their parents’ jobs, as SAS offers subsidized childcare and tuition reimbursement for the children of their employees.
14. SC Johnson & Son (Racine, WI)
Employees at SC Johnson & Son, the household supplies manufacturing giant, are treated more like luxury hotel guests than office workers; they have access to an on-site concierge that offers services like sending packages, picking up groceries, taking cars in for services, and even waiting in line for concert tickets.
15. Smucker’s (Orrville, OH)
Employees at Smucker’s feel the love as soon as they are hired; Smucker’s sends an elaborate gift basket to the home of every new hire. Smucker’s also reimburses 100% of the tuition costs of employees working toward a degree while also working at Smucker’s.
16. Spotify (London, United Kingdom)
Spotify makes parenthood easy for its employees; they provide six months of paid paternal leave and one month of flexible work options for new parents returning to their office. Spotify also covers the cost of fertility assistance for its employees as well as freezing eggs.
17. Twilio (San Francisco, CA)
Twilio, a cloud communications company, makes sure its employees are well-read by giving them free Kindles as well as $30 a month to purchase books for the Kindles.
18. Twitter (San Francisco, CA)
Twitter employees never go hungry. 3 catered meals are offered to employees at the San Francisco headquarters every day. There are also a variety of other complimentary services, including on-site acupuncture, meditation, yoga, a Crossfit gym, and improv classes.
19. World Wildlife Fund (Gland, Switzerland)
WWF employees have no shortage of free time; they are allowed to take every other Friday off, an idea the company calls “Panda Fridays.”
20. Zappos (Las Vegas, NV)
The Las Vegas headquarters of Zappos offers its employees what seems like more play than work: a yoga studio, nap room, gym, hammocks, a beach-themed conference room, and even touch-screen video games in the elevators. Zappos manager of business development and analysis Kyle Kelly says Zappos is “just a really fun place to be.”
All of these perks certainly make employment at these companies enticing to any employee. After all, who wouldn’t want unlimited time off or a concierge at their beck and call? However, not every company has the same deep pockets as a large corporation to fund perks like these. So, what kinds of perks can any company offer to help boost retention in the same way that these larger companies do? Here are 10 ideas:
- Company-subsidized outings, including activities like going to sports games or team meals
- Gift certificates for workout classes or restaurants
- A volunteer project as a company
- Social responsibility and community service resonates well with people of all ages, and especially with millennials. A recent Reason-Rupe poll found that 72% of millennials spent at least an hour volunteering for a cause they care about, and 16% took unpaid time off to volunteer (meaning they would be happy to be paid for it, too).
- Confused about how to find organizations to volunteer for? Try using sites like VolunteerMatch and Idealist to find causes you care about in your area.
- A company-wide scavenger hunt
- On-site or off-site parties (e.g., team BBQs, holiday parties, happy hours, etc.)
- Awards for going above and beyond on the team
- This is a great and affordable way to help your employees feel recognized. It could be something as simple as giving out a monthly Starbucks gift card as a reward for high performance.
- Offer the option to telecommute.
- This is a free but impactful idea. Commute times are getting increasingly longer; a report by the Texas Transportation Institute shows that the average worker spends at least 42 hours a year in commute traffic, with times in some cities like Washington D.C. and New York City reaching up to 80 hours. And these numbers are only increasing. This could be particularly meaningful to people who commute long distances to work.
- Of course, when offering such a policy, keep in mind that there a number of logistical items that need to be sorted out, such as getting approval from team managers, figuring out any IT implications, etc.
- Give the option for flexible work hours (e.g., flexible start and end times each day, compressed work weeks into four days a week). This is especially helpful for parents, who manage not only their schedules, but the schedules of their children. Similar to the telecommuting policy mentioned above, take note that this also has its series of logistical items that need to be sorted through.
- The ability to bring your dog to work.
- A study by Virginia Commonwealth University showed that employees who had their pets at work showed an 11% decrease in stress levels at the end of a workday versus the 70% spike in stress levels from people without pets at work.
- In addition, this policy has the further benefit in that people do not have to worry about rushing home to care for their pets and do not have to pay for pet-sitters.
- Host a company-wide fitness competition.
- This is a great way for team members to bond and collaborate with each other while fostering some healthy competition. It also encourages a healthy lifestyle, which helps boost overall employee happiness (exercise is, of course, scientifically proven to increase happiness due to endorphin release). Here at Wonolo, we have Gutsmack, a monthly company-wide fitness contest that helps bring the team together…and gets everyone moving (here’s our CEO, Yong, living out this mantra):
Now that you have a good base of low-cost, easy-to-implement ideas, how do you get started? Here are our top tips:
- Get buy-in from the right parties. Like any new major initiative at a company, you’ll need to get support from the key players, such as HR and team managers, as well as executive leadership. Present a data-driven case for why this is of value to the business, along with a proposed quarterly spend to further compound the ROI. Do your research as to what your competitors are doing and present that info to help build your case. For more sample data points to help build your case to demonstrate its value, download our guide.
Download Our Guide to Retention Stats Here.
- Once you have senior-level support, coordinate with your colleague who manages HR and the respective team managers to implement the rollout. Agree upon a budget to cover the costs of any expenses, and contact restaurants, gyms, etc. to see if there is a discount for company-related costs.
- Actually talk to your employees to find out what moves the needle for them with respect to perks. You might have an idea about what might appeal to them, but that’s a limited perspective. Actively survey your team to learn what matters most to them.
- To help measure the success of your program, work with HR on benchmarking your current retention rate prior to the rollout of your new retention measures. Agree with HR on what reasonable timetables would be for measuring improvements and be prepared to report out on this with senior management. Still stuck? Try implementing some of these actionable employee retention strategies today.
We can’t emphasize this point enough: Whatever your employee retention measures are, they don’t have to break the bank to be effective. In many cases, a little goes a long way. So get cracking on determining what employee retention approaches might work for you so your organization can reap benefits like these: On average, higher-engaged workforces generate 29 percent more revenue and are 50 percent more likely to have greater-than-average customer loyalty, according to Right Management. This is an opportunity that no right-minded company wants to miss out on, and employee perks, no matter how small, as a means of boosting retention are a key way to get there.