Tips For Creating A Budget For Your Staff Retention Strategy
A well-planned staff retention strategy can reduce new hire training costs and maintain your L&D investment. However, you need a clear budget to prevent overspending and maximize ROI. Those hidden fees can quickly spiral out of control if you aren’t careful. Fortunately, a little prep work now mitigates financial risks and helps you improve resource allocation. Here are 8 crucial expenses to add to your staff retention budget. Keep in mind that these costs are just to kick things off. You may need to add more to the list as your needs evolve, or even remove certain fees post-launch like software costs. In short, employee retention budgets should be flexible.
8 Crucial Expenses To Add To Your Staff Retention Budget
1. Online Training Development
The core of a successful staff retention strategy is employee development. Online training and support are no longer a hiring bonus, it’s a necessity. Staffers expect easily accessible training that caters to their needs and goals. Thus, you need to allocate funds for online training development ranging from courses and certification paths to microlearning JIT resources. This requires eLearning authoring software, an LMS, and possibly a video conferencing system. Some organizations also invest in PM platforms and advanced editing tools.
2. L&D Maintenance
Those L&D resources need frequent updates to ensure they’re relevant. You may also need to update them based on new compliance regulations or company policies, not to mention emerging gaps. Thus, you must factor online training maintenance into your employee retention budget. Do you need to curate additional content? How much time does it take to update or repurpose existing assets? There’s also the issue of content evaluation. For instance, you must assess your online training library monthly and do some housekeeping.
3. Incentive Schemes
Most employee retention programs involve incentives, ranging from gamification badges to exclusive events. Some organizations even spring for gift cards and bonuses. However, that usually adds up quickly and doesn’t necessarily support desired performance behaviors. Whatever route you choose, there are expenses involved. For instance, you need to design badges and incorporate them into your strategy, so an authoring tool with badge templates is in order. In addition, it takes money to market these incentives schemes within your organization.
4. Onboarding Costs
I’m not referring to replacement costs when employees leave the team. In this case, onboarding costs center on building a solid staff retention strategy from day one. The best way to improve employee retention is to hire the right people and train them effectively. Therefore, new hire development is another expense to add to your retention plan budget. How much can you realistically spend on each new hire? How much should you allocate for fresh content development and maintenance? Of course, recruitment is also part of the package, so you need to set aside funds for job marketing, interview, and screening.
5. Data Analysis
You must be able to identify problems as quickly as possible before you have a mass exodus on your hands. This requires ongoing data analysis so that you can disclose retention pain points and devise a new plan of action. As an example, the HR department dives into the recent batch of performance appraisals and employee exit surveys. They notice a recurring problem with frequent on-the-job mistakes and high dissatisfaction scores. Employees aren’t getting the support they need and that leads to more turnover. Thus, they can work with the L&D team and other department managers to come up with possible solutions.
6. Staff Retention Payroll
Training seat time, content development, and administrative tasks are significant payroll expenses for your employee retention program. Using the data analysis example, how much time does it take to evaluate all the reports and LMS metrics? Employees must also organize the data and identify patterns, as well as master all the tools involved in the process.
Surveys, focus groups, interviews, and polls help you disclose areas for improvement and assess employee satisfaction. Unfortunately, all these feedback methods require funds. For example, you invite staffers to a focus group and ask targeted questions. This calls for payroll hours, site rentals (or video conferencing tools), and prep work like developing that list of questions based on your objectives and prior data analysis.
Many businesses choose to outsource at least some of their employee retention program to reduce costs and turnaround time. However, hiring an eLearning content provider involves its own set of expenses such as vendor qualification, comparing top companies, and all the outsourcing fees included in the contract from curation to ongoing support. That said, you should consider the overall value for money versus total costs. For example, your L&D team won’t have to develop as much content or curate multimedia. In some cases, the outsourcing partner even takes care of the data analysis like reviewing business metrics and online training performance stats to customize your staffer retention strategy. For this reason, it’s crucial to discuss all your requirements up front to find the right vendor for your SMB.
A great staff retention strategy is an investment. As such, your budget should be paired with measurable goals so that you can evaluate ROI. For example, this is how much you’re prepared to spend to reduce employee turnover by 25% this quarter, or you need to boost employee satisfaction rates by 15% to warrant the investment. The same goes for outsourcing. Divide your budget into two distinct categories and choose the most cost-effective approach for each task or deliverable. Then develop evaluation criteria and objectives to ensure your outsourcing project is on track.
How do you retain top talent and reduce new hire training costs? Download our eBook Achieving High Employee Retention: Is Outsourcing The Best Solution For Your Business? for secrets to find the best outsourcing solution.