Employee engagement is vital to business, especially when it comes to frontline workers. Just consider the amount of productivity, experience and institutional knowledge that voluntarily walked out the door at the height of the Great Resignation. Research suggests that more than 50 million workers took part in this mass exodus in the U.S. alone.
Globally, 20% of frontline workers surveyed in 2023 said they planned to leave their jobs in the near future. While the movement has been losing some steam over the past year, the cost of employee turnover is still extremely high, as the cost of replacing an employee ranges anywhere from one-half to two times their yearly salary.
Much of the total cost involves the direct expenses associated with recruitment, onboarding, training and the like. However, there are indirect costs that drive the number even higher. Higher workloads and lower morale among remaining employees are possibilities, as are disengagement, decreased productivity and the loss of critical skills and leadership. Even more problematic is the potential of creating a culture of insecurity, which can lead to dips in customer service quality, increased errors by less experienced staff and a tarnished organizational brand.
Mitigating the costs of employee turnover for frontline workers isn’t just an HR issue. It can take a significant toll on a company’s efficiency, profitability and competitive edge. As with any change initiative, addressing the root cause of frontline employee turnover is a good start, and the likeliest culprit is culture. According to a MIT Sloan Management Review report, a toxic culture is the top predictor of employee attrition.
Squaring up workforce retention strategies by focusing on employee experience
The criticality of culture in retaining frontline employees cannot be overstated. A positive, inclusive and supportive organizational culture serves as the foundation upon which employee engagement and loyalty are built. Culture shapes the daily experiences of frontline employees, influencing their sense of belonging, motivation and satisfaction at work. When the culture is aligned with their values and needs, workers are more likely to feel connected to the organization and committed to its success. This connection is crucial, as engaged employees are those who feel valued and understood by their employers.
Thus, by cultivating a healthy culture, companies set the stage for more positive workforce retention strategies and deeper engagement, where frontline employees are emotionally and intellectually committed to their roles and the company’s mission.
Higher frontline employee engagement generally equates to higher customer engagement. Team members who are happy and engaged are simply more likely to go the extra mile for customers. As customer satisfaction is key to business success, this can provide a much-needed competitive advantage in the marketplace and drive more sustainable business growth. Decades of research have already established this employee engagement ROI. For example, one Gallup report found that organizations with engaged employees outperformed their competitors, so much so that they often enjoyed higher earnings per share.
Though there are many workforce retention strategies that focus on frontline employee engagement, the following are especially beneficial for moving organizations in the right direction. Implementing these tips will empower your organization to cultivate a culture that fosters engagement and loyalty among frontline employees, guiding your organization toward sustained success.
1. Establish employee retention metrics
Employee retention metrics will offer insights into the state of a company’s work environment. Is it a desirable place to work? What can the average tenure tell leadership about where exactly engagement might be deteriorating? Start tracking frontline employee engagement, overall retention and turnover rates, voluntary and involuntary turnover rates, absence rates and retention rates per manager. Additionally, understanding the costs associated with turnover—such as recruitment, training and lost productivity—can provide a clearer picture of the financial impact of your retention strategies.
Using advanced data analytics and machine learning, you can analyze these patterns and signals from employee behavior and feedback to proactively address dissatisfaction and improve retention. This could include monitoring engagement levels through digital tools that track participation in learning modules, attendance in team events and frequency of peer recognition. By monitoring these and other frontline employee retention metrics, you can identify trends, improve workforce retention strategies and ultimately reduce attrition costs, contributing to the financial health of the company.
2. Rethink total rewards strategies
To engage frontline employees and retain top talent, thereby securing a competitive edge, companies must implement robust total rewards strategies that extend beyond salary. While a competitive base salary forms the bedrock of a nurturing organizational culture, the strategic enhancement of the overall compensation package can significantly improve frontline employee retention rates.
Introducing premium pay for shift differentials not only acknowledges the unique challenges of different work schedules but also directly incentivizes staff commitment. Broadening access to short-term incentives, such as bonuses and additional paid leave, correlates with heightened employee satisfaction and loyalty. Incorporating elements like profit sharing, comprehensive retirement plans and superior healthcare offerings further enriches this rewards ecosystem.
These benefits not only underscore the company’s investment in its workforce’s wellbeing and financial security but also serve as a powerful catalyst for employee engagement. Specifically, they signal to high performers that their contributions are valued and that the company is committed to their long-term success and satisfaction. This holistic approach fosters a more committed and motivated workforce while positioning the business for enhanced operational stability and profitability, as engaged employees are more likely to deliver superior performance and exhibit lower turnover rates.
You can go beyond the traditional rewards and introduce “wellbeing budgets” for employees to spend on what matters most to their health and happiness—gym memberships, childcare or educational pursuits, for instance. Additionally, real-time earnings programs where employees can access earned wages on-demand, rather than waiting for biweekly or monthly pay periods, are gaining popularity. This flexibility addresses immediate financial needs and can significantly boost employee satisfaction and loyalty. No matter your approach, it should align with the evolving needs and preferences of your frontline employees.
3. Invest in employee development
Development shouldn’t end after onboarding, nor should it end with the responsibilities of an employee’s current role. As such, many organizations are now investing in continued frontline employee development. Oftentimes, development will be tied to an actionable path for career advancement. Statista found that 63% of employees cited a lack of advancement opportunities as the reason they left their jobs in 2022, so this will be key.
Many companies have taken development a step further by making it more holistic, offering education around personal finances, mental health, emerging technologies, industry trends and the like. It’s an effort to create a supportive work environment that emphasizes work/life balance, health and wellbeing. It also shows that you, as an employer, consider employees’ situations and actively support employees in creating better opportunities for a stable and successful life.
Development should be mutually beneficial for the company and the employee. For example, you could integrate AI-driven platforms that personalize learning experiences to match individual learning styles and career paths. Gamifying learning modules and providing clear skill-building paths that align with projected future industry trends can also engage employees more deeply. In the modern workplace, leveraging technology in these ways is crucial.
Engagement platforms can facilitate communication, provide access to training resources and offer real-time feedback, which are all essential for fostering a connected and informed workforce. Additionally, technology can help personalize the employee experience, making it possible to recognize and respond to employees’ individual needs and preferences.
Revamping frontline employee retention demands a holistic approach. By thoughtfully implementing these targeted retention strategies, you can not only mitigate the high costs associated with turnover but also champion a culture of support and belonging. This ultimately creates a ripple effect, driving enhanced customer satisfaction, operational efficiency and profitability. Embracing these practices is not just about retaining talent—it’s about fostering a thriving ecosystem where employees and businesses alike can achieve unprecedented success.
Learn how to leverage company culture to support workforce retention strategies at HRE‘s upcoming Elevate People, Ignite Change Conference, April 24-26 in Las Vegas. Click here to register.
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