It should come as no surprise that companies that lead in employee engagement are often some of the most successful and profitable companies.
Poor employee engagement means turnover, low morale, poor customer service, and a general blow to your bottom line.
However, the issue becomes ultra-costly when high-performing employees start leaving because of low engagement.
Similar to keeping good customers, the cost of replacing high-performers easily outweighs the cost of retaining them. This easily illustrates why employee retention is important.
According to Gallup, just 13% of employees are engaged at their jobs.
But Gallup has spotlighted 40 companies that buck this trend and have employee engagement rates at around 64% — a huge, huge difference that pays many dividends for these organizations.
We took a closer look at what five of these organizations are doing to come up with some actionable employee retention ideas.
CarMax Makes Hard Times Easier on Employees
The recession in 2008 made for tough times for companies and their employees across the globe.
But instead of saving money for the company by cutting employee benefits, perks, and recognition programs — and frankly, employees themselves with layoffs — CarMax decided to go in the exact opposite direction.
During the 2008 recession, CarMax and its president and CEO Tom Folliard decided to invest more heavily in employee programs.
CarMax boosted its employee training and development programs, helping existing employees earn raises and jump through the ranks of the company.
The company also focused on cultivating its own employee ideas via feedback to better their customer experience. Those ideas were then rewarded in strong employee recognition programs.
In essence, CarMax became all about its employees.
In a statement during his speech at the Great Place to Work conference in 2012, Folliard said: “Take care of your associates, they will take care of our customers, and the rest will take care of itself.”
Since 2009, CarMax results were summed up by the Motley Fool in a single word: impressive.
CarMax sales are up 116% in 8 years, or 14.5% annualized.
Charles Schwab Treats Its Employees as Well as Its Clients
Charles Schwab doesn’t just care about the financial future of its clients; it invests that same care and attention into the financial future of its employees.
The financial-based benefits plan is off the charts, offering a 401(k) matching system that can be boosted with rewards from its employee recognition program — that’s looking into your staff’s future.
The majority of the company’s workforce also participates in the corporate bonus plan.
Perhaps most unique is that the company enables employees to help other employees, which has to be one of the most effective employee retention techniques.
Staff members are all offered complimentary personal Charles Schwab financial consultations and support as well as financial workshops and discounts and savings on their own trading and portfolio.
To make employee’s financial positions even stronger, they offer an employee stock purchase plan and comprehensive medical, dental, and visual plans, as well.
Hyatt Trains Its Employees for the Long Term
On average, an employee in housekeeping stays with Hyatt for more than 12 years.
Altogether, more than 14,000 of Hyatt’s approximately 75,000 US employees have worked at the company for more than 10 years.
Clearly, the hotel company is doing something to keep its staff around.
The training program at Hyatt is top-notch, and the company has a solid program of hiring from within by identifying potential leadership candidates from its existing workforce.
In the last few years, the company rolled out an entirely updated training program called “Change the Conversation,” which is based on principles from the Stanford School of Design that emphasize listening.
Employees are encouraged to find new, creative ways to solve problems and accomplish everyday tasks. It trusts its own employees so much that its number one source of new hires is via recommendations by its Employee Referral Program.
Moreover, Hyatt has championed diversity in its workforce.
For 10 years running, Hyatt has made the Human Rights Campaign’s Best Place to Work for LGBT Equality list; the AARP called out Hyatt’s commitment to hiring older Americans; and Hyatt has been featured by the NAACP and Hispanic Business magazine for its hiring of African American and Hispanic employees, respectively.
Inchcape’s Charitable Social Programs Make Work Meaningful
Inchcape has an embedded employee engagement program called “Incredible Inchcape,” which focuses on building what it believes to be a great place to work by committing to its community.
A major part of Inchcape’s company values center around its societal and environmental impact.
It’s transparent about its carbon dioxide release levels, and it has worked to continuously decrease its greenhouse gas emissions — keeping employees, clients, and the global community on top of all of their statistics.
Inchcape also regularly contributes to charities across the globe — in China, Romania, Ethiopia, Latvia, Singapore, Macedonia, and more — with an emphasis on donating to orphanages and local environmental causes.
And they don’t just contribute money; they contribute time and attention as well. For example, an Inchcape team spent Christmas day at a village in the Jiangxi Province in China where most of the children are orphans.
They celebrated the holiday with 150 children with games, music, and crafts.
Moreover, Inchcape has worked to align its employee recognition program with these values, rewarding employees who live the company culture with discounted new cars, services, and financial rewards.
Mars, Inc. Is Pretty Sweet to Its Employees
It’s not just that employees get to munch on free M&Ms — though that doesn’t hurt — the colossal chocolate and snack food empire knows that it can show its appreciation for employees by living its company values.
Maybe that’s just how it’s done in a 100% family-owned business.
The Mars family is notoriously private, but it seems that characteristic only boosts employee (or Martian) pride in the company.
According to research by Fortune, turnover is only around 5% in the United States, and the company can claim families who have had generation after generation working for the company.
Mars knows that to inspire this kind of dedication, it has to earn it.
The Five Principles of Mars — quality, responsibility, mutuality, efficiency, freedom — are on every wall of every Mars office and manufacturing site across 73 countries. And as employee Will Turnipseed told Fortune, “they’re cult as much as culture,” but “they don’t tattoo them on us or anything like that.”
And Mars takes its values seriously. Take, for example, “quality.” Around 2% of all M&Ms produce are discarded for “blemishes” or other failures in quality.
These five companies know what it takes to boost engagement, which will drive your employee retention rate through the roof. Learn your lesson from the ones doing it the best. And make sure that you don't have an unseen retention problem in your office.
Editor’s Note: This post was originally published in July 2015 and has been updated for freshness, accuracy, and comprehensiveness.
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