Employee retention ideas: Student loan perks; weekly profit sharing … and one more great idea

employee retention strategies

If you’re like most HR pros, you can probably use all the help you can get with employee retention ideas, right?

With that in mind, here are three retention-boosting success stories, implemented in real time, and shared by HR pros just like you.

This benefit may one day be as common as the 401(k)

Based on “Helping Employees Become Financially Fit,” by Brendon McQueen, as presented at the Dig|Benefits Conference, Austin, TX

Student loan repayment benefits may be relatively sparse now, but there is a convergence of factors that could lead to this perk being as critical as a retirement plan for employers’ benefit offerings.

For Brendon McQueen, the CEO & founder of Tuition.io, his investment in this benefits issue obviously makes him a bit biased. But the facts behind his prediction are hard to dispute.

McQueen believes student loan repayment benefits “will be the next 401(k).” Here’s why:

Millennial impact on student loan debt

According to McQueen, it all starts with the culture among younger workers, a group that will soon be the dominate worker demographic.

The average tenure of Millennials is around 16 months, and the bulk
of these workers are saddled with a sizeable amount of student loan debt ($30,000 on average).

That revolving door mentality among younger workers hurts employers’ retention rates and costs a fortune in extra recruiting and training costs.

Plus, student loan debt makes contributing to a 401(k) a low priority so employers’ 401(k) participation rates suffer as well.

Because student loan debt is so important to younger employees, companies that offer relief in this area will have a big leg up on the competition and likely be able to bolster dwindling retention rates.

39 and over have student loan debt, too

What’s more, student loan debt isn’t only an issue for Millennials.

Thirty-five percent of all student loan debt is held by individuals over the age of 39. Many people also have Federal Parent PLUS Loans, loans for parents to help finance their children’s college education.

But student loan repayment benefits are just the flavor of the month, right? That’s what many employers seem to think about this new and largely unused benefit.

McQueen addressed this concern by comparing student loan benefits to 401(k)s, showing exactly why the former is likely follow the same trajectory as the latter.

When 401(k)s officially launched back in 1982, many employers and business groups believed the benefit wouldn’t last. By 1983, the retirement plan design had exploded among employers.

And the triggers for that explosion are very similar to those surrounding student loan repayment benefits: The government had a vested interest in addressing individuals’ lack of retirement preparedness and introduced bipartisan legislation to do just that.

The same can be said of the current student loan debt crisis. Helping individuals with student loan debt is a pro-consumer, pro-business objective. Plus, it’s one of the rare political issues that has bipartisan support.

This two-tiered appreciation program boosted retention and morale

Courtesy of Kaitlyn Uden, HR manager, Parkland College, Champaign, IL:

We put a lot of effort into making our new hires feel welcome, but we also knew we needed to focus on keeping our current employees happy to hang onto them.

That’s when we formed our “Fun Raising” team, solely dedicated to appreciating our employees through fun activities.

Throughout the year, the team puts on great events like pop-up escape rooms, free ice cream days and company spirit weeks. Around Thanksgiving, we always tell our staff how thankful we are for their hard work.

We’ve gotten a terrific employee response to this. But we wanted to take it even a step further and help our workers show appreciation toward each other as well.

Kudos for colleagues

As we brainstormed employee retention ideas, we hit on an idea we called the “Kudos for Colleagues” program.

We launched it with a huge kickoff event and an all day drop-in party in the HR department. People could stop by any time to grab a donut, play games or just hang out for a while.

But the most important part was the kudos cards we had for employees to fill out.

They’d write down the name of a co-worker and explain what made them awesome at their job. It’s a great way for our team to celebrate the people they work with.

A pleasant surprise

Since the initial launch, we’ve been sending out nomination cards once a month.

A random winner is chosen each month, receiving a trophy and prize to share with their department.

We also profile the winner in our employee newsletter and post their photo outside of HR.

Even those who didn’t win are recognized. Everyone who received a nomination gets the card with their co-worker’s compliment.

Fun, but effective

It may seem a little silly, but our people are proud to receive the recognition, and our team has really embraced the program.

Since starting Kudos for Colleagues, we’ve always received at least 40 nominations each month. Sometimes, we’ll get as many as 100 out of an employee pool of about 500.

While it’s hard to get solid numbers backing the program’s effectiveness, our employee surveys show widespread satisfaction with it.

Positive atmosphere

By employees recognizing and complimenting each other, the atmosphere here has really become supportive and positive.

We’ve also heard from managers that morale and enthusiasm are strong, and they’re seeing employees going above and beyond in providing customer service.

Not to mention, retention has vastly improved since we started the program.

Another bonus: It’s been months since we’ve started the program and participation is still going strong.

Boosted retention with retirement perk tweak

Courtesy of Lorna Dickinson, payroll coordinator, Union Bank, Lake Odessa, MI :

Like most companies, we wanted to keep our people around long term. And we were willing to try some unique strategies to improve retention. 

As a way to brainstorm employee retention ideas, we formed a committee of employees from several departments to ask for suggestions. And one idea really caught our attention.

Our company already offered a profit-sharing plan where a portion of the company’s annual profits was distributed to employees’ retirement accounts based on a percentage of their salary.

Usually, we made these contributions as a lump-sum payment every year.

But an employee suggested we change our strategy and contribute each pay period instead.

Noticeable reward

This person made a really good point: By making contributions each week, employees were more likely to relate the extra money to the work they’d recently completed.

Because they’d see this reward on a regular basis, they’d feel more invested in the company’s success – and they’d want to stick around to reap the benefits of that.

It didn’t take much extra work on my part to add profit-sharing contributions to each payroll.

The best part: It more than paid off by giving us another way to motivate and retain our employees.

Tim McElgunn and Rachel Mucha contributed to this article.

Rich Henson
Rich Henson, a member of the HRMorning staff, has spent the past two decades developing potent HR and Management content that helps guide successful leaders forward with confidence. He is a former editor and reporter with The Philadelphia Inquirer. Email: rhenson@hrmorning.com