Improve Employee Retention with Workplace Perks

As a business owner, at any given moment you’re juggling tons of things on your plate—making payroll, managing the workplace, keeping supplies properly stocked, troubleshooting tech issues. Worrying about whether the staff you’ve hired is happy and fulfilled needn’t not be another thing on that ever-growing list. Employee retention can be tricky but in thoughtfully thinking of valuable perks to put in place, you can put both your mind at ease as well as ensure employees feel needed and valued. After all, employee satisfaction is a win-win for everyone. 

Read on for some ways to get a hold on employee retention at your business and ensure in both small and large ways that new and old employees stick around for the long haul. 

Health insurance 

Our health is truly our wealth and quality health insurance will go a long way with your employees. Having to manage a persistent sinus infection or a larger health crisis can be stressful, especially without health insurance. In providing health insurance for employees of your business, you demonstrate a level of care for their well-being. Beyond that, many gyms offer deals to businesses who want to incentivize employees to join. Employees that are in good health are those who can contribute effectively to the bottom line of your business. 

Family-like environment

Yet another way to demonstrate care for your employees is fostering a family-like environment. Keep a running tab of employees birthdays in an office-wide calendar for both you, as the business owner, and for fellow colleagues to see. If an employee has recently gotten married, had a new child, purchased a new home, had a death in the family or any other victory/setback, make note of it. Give employees cards or gift cards to both celebrate and comfort them in their time of need. These thoughtful notions speak volumes. 

Vacation and paid time off

Everyone needs a little time off sometimes. In offering vacation and paid time off for your employees, you contribute to work satisfaction long-term and give space for your staff to take breaks avoiding burnout. What’s more, having adequate vacation and paid time off is a great way to attract top notch talent to your business during hiring stages. Employees need to feel encouraged to both work and rest to be the best staff member they can be. 

Performance bonuses 

Another great way to contribute to employee retention are performance bonuses. What better way to show those you’ve hired and remind them they are an integral part in rewarding them with extra money? Plan in advance when you’ll offer performance reviews and bonuses based on the results of those. 

Paid sick days 

To the addendum of health is your wealth, and paid sick days fall into the same category. Employees need to feel that when they are unwell, it is okay for them to rest and take time off work to get better. And to be paid for that time when they are unwell. Make sure to have paid sick days as an option for employees to opt into. 

401(k), retirement plan and pension

As much as you’d love to have your employees with you forever, there will come a time when they will move on and retire. When that time comes, you’ll want to, as a business owner, have protections for them in place to cushion them for their hard work for your business. Have 401(k) or other retirement plans or pensions available to be chosen from. 

Flexible schedule 

An additional method for improving employee retention is to have flexible schedules as an option for all new hires and for employees period. Talk to both your new hires and employees that have been with your small business for a while to ask if their schedule works for them. Be open to allowing employees to come in later and leave later or come in early and leave early. Remember: a happy employee is a productive one and one that will stay with your company. 

Office perks

Your employees will spend the vast majority of their waking life at your small business so why not have some perks in office for them to enjoy? Think of things that would be appreciated such as a free lunch every now and then, employee appreciation barbecues in the warm weather months or even office parties for the holidays. A robust break room with free snacks as well as coffee and water are always good ideas, too. 

Employee development programs 

Want to motivate your employees to continue to invest in themselves and ensure employee retention at the same time? Employee development programs are the route to go in. Offer a robust list of activities for employees of your small business: tech skills, interpersonal communication, leadership. Encourage employees to take part in these programs with frequent reminders and updating offerings throughout the year. 

Sam Casteris is a small business owner and freelance writer operating out of Phoenix, AZ. You can find more of her work on Contently.

How to Keep Employees Productive during Renovations

A renovation can be a great way to improve the productivity and effectiveness of your business. Whether it be renovating facilities that have become outdated, performing necessary repairs, or building out a brand new space, renovations can be an exciting time and can serve as a great rallying point for your employees. The problem comes, though, when trying to figure out how to continue to effectively utilize your employees, even when their typical workspace is disrupted in some way. Fortunately, there are a few areas where you can re-direct their attention and energy to ensure they continue to make a valuable contribution to your company.

Let Them Help

If the renovations are fairly minor and low-risk, you can potentially recruit interested employees to assist in the renovation efforts. Now, to be sure, some renovations, like metal roof repair, knocking down walls, or electrical work, should be left to the professionals. However, more simple tasks, such as painting or organizing, can be left to those employees who are displaced. Just be sure to keep the activities especially low-risk to help prevent any worker’s compensation claims.

Let Them Prospect

If your business depends on customer retention to succeed, it’s likely that most of your business’s efforts are focused on doing just that. Of course, you probably have employees dedicated to prospecting new customers as well, however, the more energy you’re able to devote to prospecting, the better. Allow employees who can’t be at their desk to engage with local businesses to network and prospect, even if that’s not what they normally do. By taking this time to allow them to re-focus by doing a different task, they’ll be even more effective and productive at their typical task when they’re able to return to it.

Let Them Dream

Any interruption in normal business activities is typically an opportunity for your employees to talk amongst themselves. Why not take advantage of this talking to gain new ideas for your business, moving forward? Gather affected employees together and guide them in discussion of what ideas they have, what changes they would like to see, and any other contributions they can make to the future of the business. By letting them know their voices are heard, you’ll increase retention and potentially gain some great ideas in the process.

Let Them Serve

If your normal business location is going to be totally out of commission for a while, it can be a great opportunity to do some community service while you wait to be able to return. Get your employees out in the community picking up trash, repairing homes, volunteering at a soup kitchen, or whatever else you’re passionate about. These times of service help your community, improve your public image, and help give your employees greater appreciation for the company they work for.

Keep It Smooth

Whatever you do during a renovation, ensure that you have it planned out well in advance to ensure your employees’ engagement doesn’t suffer. Let your employees know that things are likely to be different but that doesn’t mean your expectations are lower or that they’re free to do as they please. If you still plan on paying them, they still owe you work of some kind in exchange for that pay. If you can make that work stimulating and beneficial, then all parties are sure to benefit.

Dixie Somers is a freelance writer and blogger for business, home, and family niches. Dixie lives in Phoenix, Arizona, and is the proud mother of three beautiful girls and wife to a wonderful husband.

3 Million Americans Quit Their Job Every Month: Top Tips for Employee Retention

Employees deserve to feel satisfied about their work, but it appears that a record-setting number aren’t. According to a survey of employment trends, approximately 3 million Americans quit their jobs each month. For many companies, this is a huge loss–both in talent and in money. After all, it can be expensive to replace your employees. In order to prevent your employees from walking out your door for good, you need to strategize carefully to encourage employees to stay. Yet, it may not be as hard as it may seem. Here are some pointers to help you retain your workforce.

Invest in Your Office Environment

Look over your budget and see if there is room for you to invest in sprucing up the office. It’s been proven that employee performance is significantly impacted by what their workplace looks like. You can start out small: consider redecorating to create an open floor plan, which in turn fosters greater collaboration. A support network like that makes everyone look forward to going to work.

Foster Positive Workplace Culture

The mental atmosphere in the office is just as important as the physical one. Organize regular team building events that go beyond building marshmallow towers or egg racing. Get creative with activities such as a volunteer outing or cooking classes. This helps employees feel a greater personal connection to each other and the organization, and will make them want to stay as a result.

Survey Your Employees

Your own initiative goes a long way, but you should also take employee input into consideration. Send out regular surveys to monitor office morale—but not too often, otherwise employees may feel annoyed. Checking in to see how everyone’s feeling shows you care. It lets them know that your staff are valued and are a critical part of the organization so they’re less inclined to take off. Surveys don’t have to be direct, either: you’ll also learn a lot from just taking part in the classic water cooler conversation.

Encourage Professional Development

Employee retention also has a lot to do with creating opportunities for growth. Give them something to work towards as much as you give them to work on. Hiring an executive coach can help with this. Bring one in for a workshop or similar event. Your employees will then recognize their own potential within your organization and be motivated to work harder as a result. It’s also been said that a rising tide lifts all boats, so if even one employee gets inspired, that extends to everyone else, too.

When you’re a business owner, you’re especially concerned about keeping employees on board. Making sure that your organization’s goals align well with their personal interests will keep them from jumping ship.

Growing Growth: Perform Your Own Cohort Analysis with This Open Source Code

Cohort analysis, retention, and churn are some of the key metrics in company building.

But this isn’t just another article about cohort analysis. If you’re a seasoned data scientist that already knows the importance of the topic and want to skip the introduction, you can jump to the simulator, where you can learn how to do cohort analysis and simulate startup growth based on retention, churn, and a number of other factors, or analyze your own PayPal logs with the software I’ve open sourced.

If, however, you don’t realize that these are some of the most important metrics around–continue reading.

Introduction to Cohort Analysis

First, lets understand what we’re talking about here with a cohort analysis definition. Briefly, a cohort is a group of subjects with a common defining characteristic. Maybe it’s their age, maybe it’s their nationality, maybe it’s their city of birth, etc.

Age is a particularly good example. Often, we refer to those born between the 60s and the 80s as members of “Generation X” and those who were born between the 80s and 90s as members of “Generation Y”. Each cohort, each generation, has its own defining characteristics.

Similarly, any company can group and analyze their customers by cohort. A common and very useful way to analyze your customers is to group them by the date at which they started to use your service.

1

What if I were to ask you: “How much of your revenue last month came from customers who started to work with you a year ago?” Any at all? New users may look good, but signups alone don’t equate to revenue. Do you know the answer? If not, it’ll be helpful to learn about cohort analysis.

Cohorts, retention, and churn analysis

If you analyze your revenue by cohorts, you can deduce (on a monthly basis) how much of your revenue comes from new users and how much comes from old users. Plus, you can take the next step and predict future revenue attributed to retention and accounting for churn with a significantly higher degree of precision.

Ok, so we’ve established that a cohort is a group of people with a common defining characteristic. From here, we’ll proceed by example, examining the metrics of our new hip cloud computing startup. Let’s start by analyzing just a single cohort. In this case, we’ll look at the customers that started working with us in January 2012.

The first important metric that we need to calculate is retention: how many of our new January users were still with us in February? Say we had 100 subscribers in January, and only 20 decided to cancel their subscriptions, leaving us with 80 subscribers remaining in February. Basic retention analysis tells us that’s an 80% retention rate. Now, let’s say that 8 customers decided to cancel in February. So in March, we have 80-8=72 users. Since 72/80 = 90% we had a 90% retention after 2 months for our January 2012 cohort.

Some people calculate retention as a function of the initial size of the cohort, but I prefer to calculate retention as a function of the previous month of each cohort.

Churn rate is another essential metric. It’s can be defined in terms of retention: churn = 1 – retention. So 80% retention implies 20% churn. In words, it’s the rate at which customers are leaving your service.

Returning to our cloud computing startup, let’s analyze an ideal (read: unreal) case: 100% retention rate. That means that none of our customers leave the service–no one cancels whatsoever. Lets say our company gets 1,000 new customers per month. After 24 months, this company has 24,000 active customers. Not too bad. Unfortunately, this scenario is basically impossible–100% retention only exists in startup paradise.

2

Now, let’s be slightly more realistic and say that our company has a 90% retention rate. In other words, each cohort loses 10% of its customers every month. Again, we’ll assume 1,000 new customers every month.

In this case, after receiving 1,000 new users in January 2012, we lost 100 customers in February, 90 in March, 81 in April, and so on. Let’s see what this graph looks like.

3

If you look at the previous cohort graph you will realize that the total number of active users is reaching a saturation point around 9,000. It can be demonstrated mathematically that this company will no longer grow beyond 9,000 users, even when it’s receiving 1,000 users per month.

With 1000 new users per month at a 90% customer retention rate, we have around 9,000 monthly active users after 24 months. Compare this to 100% retention, and we have just 37.5% of the ideal case (24,000 customers).

Put simply: a 10% drop on the retention rate caused a 62% decrease on the total number of active users after 24 months.

The key takeaways here: low retention rates limit growth, andusing software for cohort analytics is useful for understanding your retention rates.

Growing growth

Now, you might be thinking: “But Alejandro, wait! If every company has a churn rate, and churn rates limit growth, how do some companies achieve hockey stick growth?”

To which I would respond: “Because their growth is growing.”

There are several ways to increase growth: increasing the marketing budget, optimizing conversions, and creating referral programs can all contribute to viral growth. Let’s analyze the case of viral grow, in which the number of new customers is affected by the company’s total number of active customers. In other words:more customers on the system equals more people referring new customers equals more new customers.

Let’s say that the company is growing virally with a constant (K) factor of 0.20 and that the formula we have applied to calculate the number of new customers is:

New customers (month) = k * Total number of Customers (month-1)

Now, let’s visualize the same example as before (1000 new users per month @ 90% retention), but this time, we’ll throw in some viral grow (with K = 0.20).

4

From this cohort analysis graph, there are two key takeaways: firstly, a constant factor of 0.20 has caused a 1000% increase in the total number of active customers (~90,000) after 24 months; and secondly, the system is still growing after 24 months–it didn’t reach a saturation point.

So, to compensate for our 90% retention rate, we need to create mechanisms to grow our growth every month.

Now, at this point, you might be saying: “Wow, Alejandro: viral growth is clearly more important than retention. Look at how it’s affected our customer base!”

To which I would respond: “Not so fast.”

Let’s analyze one more case. Our good ol’ cloud computing startup, but with a 50% retention rate. We’ll stick with 1,000 new users per month and a viral growth rate K = 0.20. But regardless of the virality, our company is performing really badly, losing 50% of our customers on every cohort, every month.

5

After 24 months, our company only has 3,000 active customers instead of 90,000–that’s a 30x difference! Retention truly is key.

But why does retention have such a powerful effect? In short: Because viral growth depends on the number of active customers, so if we keep our users for longer, we’ll have more referrals.

To recap:

  • Generally speaking, churn limits growth.
  • Retention increases viral growth.
  • Good retention and viral growth are prerequisites for scaling a company to millions, or even billions of users.

A final word on churn rate analysis

It’s pretty common to see more customers cancel a service during the first month of use than later on. That’s why in the following simulation, I provide you with two retention rates: the First Month Retention Rate and the Long term Retention Rate. Using these parameters in our calculations will lead to more precise results.

Conclusion

The purpose of this cohort analysis tutorial wasn’t to give you a detailed class about metrics and cohort analytics; in fact, others discussed the complexity of these statistics in far more depth. Instead, I want to awaken you to the importance of this type of analysis and, more importantly, to show readers their own revenue cohort analysis examples and churn rates with my open source cohort analysis software solution.

If there is just one question to wake you up, it’s the following:

How much of your actual revenue comes from users that started working with you a year ago?

How to do your own cohort analysis

Now it’s your turn! There are two ways to analyze your own business’s retention and churn:

  1. Upload your PayPal Data to the tool I’ve deployed. For full disclosure, please note that by using this tool, your log file will temporarily be placed on a server for processing (deleted as soon as the data is displayed). However, if you prefer, you can always…
  2. Download the open source code and deploy the tool yourself. The README contains detailed instructions for how to do so. If you don’t have a PayPal account, you can hack the code easily to analyze other types of accounts.

Alternatively, you can play around with our simulator and visualize startup growth based on all the parameters discussed above. You may also benefit from another tutorial on data conversion and mapping.

Thanks for reading!

 

For Profit or For Students???

Retaining students at for-profit institutions often has a different meaning than retention at not-for-profit colleges and universities.

Accountability meetings are not about ensuring students are succeeding; the meetings are about ensuring the admissions department meets their budgeted numbers and that the academic affairs department is retaining students. The question has to be what methods are being used to retain students. If the methods violate academic integrity then are we really serving the students, the academy, or the public who funds these institutions?

Many schools invest heavily in student remediation, student success, and quality faculty. This does not always seem to be the method for-profit institutions choose to follow. Marketing is the lion’s share of the for-profit’s budgets along with settling the large number of lawsuits they seem to incur from dissatisfied customers; students who are left unemployable and unable to repay the government because of the debt they have incurred.

Many of the students that enroll in for-profit schools are those that would not be accepted into a traditional college or university. Would these students be better served by a community college? What do you think? Read Senator Harkin’s report just released on the subject.

For-Profit College Report: Harkin Unveils Comprehensive Report on For-Profit College Industry