Steps to Improve Employee Retention: The Role of a Streamlined HR Department

Published: August 17, 2023 by Angela Lojacono

Employee retention refers to a company’s ability to keep its employees satisfied in their jobs and retain them. Creating a positive workplace environment that values employees, their well-being and growth can create a culture where employees are less likely to leave. Employee retention is vital for various reasons. To start, continually hiring and onboarding new employees can be extremely costly. On top of that, organizations with high turnover rates might indicate a poor culture, which can tarnish their reputation.

In this guide, we’ll walk through ways human resources (HR) departments can improve employee retention. With these ways to improve employee retention, you can create a positive workplace environment fostering productivity, employee satisfaction and loyalty.

The Role of an HR Department in Employee Retention

The role of an HR department is to manage an organization’s most important assets: human resources. This includes a wide range of responsibilities, including attracting, hiring, developing and retaining employees. In this guide, we’ll focus on how to improve employee retention and the role HR plays in handling employee relations. Let’s start with the importance of HR in employee retention.

Affects of HR

An organization’s human resources department can significantly impact its ability to retain employees. As stated, high employee turnover can be costly in recruiting, hiring, onboarding and loss of productivity. HR departments must implement strategies that focus on creating a positive company culture encouraging employees to stay. Some of the ways HR affects employee retention include:

  • Hiring the right staff: A primary role of HR departments is to hire the right people. In order to retain employees, you need to hire staff that is a good culture fit for your organization. It’s important to conduct interviews, reference checks and background screenings to gather enough information to determine whether a prospective applicant would integrate seamlessly into your company’s culture.
  • Implementing a thorough onboarding process: After hiring an employee, HR departments are responsible for training and onboarding. By having a thorough onboarding process, HR departments can increase the likelihood of retaining employees, as it demonstrates their commitment to offering employees growth through training, coaching, mentoring and career development.
  • Creating a positive workplace environment: HR departments are also tasked with creating a positive work environment that fosters a culture built on respect, communication and collaboration. HR departments can create a positive work culture by addressing employee concerns, ensuring a healthy work-life balance and recognizing employees for their accomplishments with rewards.
  • Offering competitive benefits and compensation packages: As much as employees want to work in a safe and welcoming environment, they always want to feel valued for their work, which means HR departments need to offer competitive benefits and compensation packages. Through competitive salaries, bonuses, retirement plans, health insurance and additional perks like home office stipends and free gym memberships, HR departments can ensure employees feel valued and appreciated.

These are some ways HR departments play an essential role in improving employee retention.

Responsibilities of HR in Employee Retention

If you want to know how to improve employee retention, it’s important to understand the responsibilities of an HR department in keeping employees satisfied at work. Some of the primary duties of HR in employee retention include:

  • Conducting exit interviews: Exit interviews occur when an employee leaves the organization. Through exit interviews, HR departments can better understand the reasons for an employee’s departure, whether it be an underlying issue like a hostile work environment or a poor compensation package compared to other organizations in the industry.
  • Implementing employee retention strategies: An HR department can implement numerous employee retention strategies, such as employee recognition programs, creating a positive workplace environment and offering career development opportunities.
  • Monitoring employee satisfaction: It’s important to continually monitor employee satisfaction throughout the year. HR departments can do this by offering employees the opportunity to partake in anonymous employee surveys, focus groups or other feedback mechanisms to gather information to identify areas for improvement. With that data, changes can be made to ensure employees are satisfied.

These are just some ways an HR department can improve employee retention. By ensuring these responsibilities are met, HR staff can create an environment that values employees, their well-being and growth.

Challenges Faced by HR

There are many ways to improve employee retention, but there are also various challenges HR can face in the process. Some of the top challenges HR may face in retaining employees include:

  • Competition: One of the top challenges is competition from other businesses in the industry. In some cases, other organizations may offer more robust compensation packages that your organization can’t compete with, so it’s important to provide additional perks to attract top talent.
  • Hiring the wrong employees: HR departments can generally get a good read on candidates through interviews and background screenings. However, in some cases, they may hire the wrong employee who isn’t a great fit for the role. When this happens, it can lead to unhappiness with their responsibilities.
  • Unrealistic employee expectations: Depending on the size of your organization, you may not have the resources as other large corporations, which can create unrealistic employee expectations that cannot be met, whether it’s offering free lunch every day or providing the leading software to accomplish tasks.

Streamlining HR Processes

If you’re looking for ways to improve employee retention, streamlining HR processes can help. There are several ways an HR department can streamline its processes and operations that result in a satisfied workforce. Let’s take a look below.

What is a streamlined HR department?

A streamlined HR department occurs when HR departments operate in the most efficient way possible. By streamlining your HR department, you can eliminate time-consuming administrative tasks and focus more on strategic HR initiatives that support the organization’s objectives.

Benefits of Streamlining HR Processes for Employee Retention

There are many benefits of streamlining HR processes to improve employee retention, including:

  • Improved efficiency: Streamlining HR processes can help improve efficiency by automating administrative tasks to improve the speed and accuracy of HR responsibilities, which can reduce workload and support employee retention.
  • Increased employee satisfaction: Employees often turn to HR departments when they need help regarding a wide range of concerns, including compensation, insurance, time off and safety. A streamlined HR department can address concerns swiftly and accurately to keep employees satisfied.
  • Improved compliance: Streamlining HR processes can help increase the accuracy of HR-related tasks, which, in turn, can improve compliance with state and federal regulations to reduce the risk of legal issues and fines that could impact employee retention.

Impact of Streamlined HR Department on Employee Morale

Having a streamlined HR department can have a significant impact on employee morale. Some of the ways streamlining your HR department can improve employee retention and morale include:

  • Improving communication: Streamlining HR can improve communication between employees and HR staff, making them feel more valued.
  • Increased access to information: Employees want to be informed about HR policies, procedures and benefits. Streamlining your HR department can help employees make informed decisions.
  • Better work-life balance: When employees are informed about HR policies and procedures, they can better manage their work-life balance by taking advantage of telecommuting or flexible work arrangements.

Best Practices for Streamlining HR Department for Employee Retention

Some best practices for streamlining your HR department to improve employee retention include:

  • Automating administrative tasks like payroll and I-9 administration
  • Using HR analytics to make informed decisions
  • Offering career development opportunities
  • Implementing employee self-service portals to access HR information, documents and benefits
  • Providing competitive benefits and compensation

With Experian Employer Services, our workforce management solutions can help you streamline many aspects of your HR department, from pay statements to unemployment management and compliance, to improve the overall employee experience.

Strategies for Improving Employee Retention

If you’re looking to improve employee retention, there are numerous strategies you can implement. Here’s how to improve employee retention:

  • Offer competitive compensation: Employees are often motivated by strong compensation and benefits packages, so regularly review and adjust salaries and benefits to remain competitive with other companies in your industry.
  • Recognize and reward employees: Make sure to continually recognize and reward employees for their contributions, such as having an employee of the month or offering bonuses when targets are met.
  • Conduct employee feedback sessions: Throughout the year, conduct employee feedback sessions to gather information on how employees feel at work, including the culture, work-life balance, compensation and growth opportunities.
  • Promote work-life balance: Employees are more than their jobs, which means it’s important to foster a culture built on a healthy work-life balance, which can be done by offering flexible work arrangements or telecommuting opportunities.
  • Provide career development opportunities: Employees also want to progress in their careers, so it’s important to offer career development opportunities, such as training, coaching and mentoring to improve employee retention.

A strong HR department has a significant impact on improving employee retention. By streamlining your HR department and implementing these ways to improve employee retention, you can create an environment with a committed workforce satisfied in their roles.

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