Employee retention currently ranks as one of the top priorities for organizations. In one recent survey by Bonusly, it was cited at the biggest challenge for the HR department alongside turnover.
The costs associated with replacing top talent are what make employee retention such a monumental challenge. When you lose one of your employees, you lose their working hours and expertise. You may also need to replace them. But that takes time and costs a lot of money.
On average, it costs 16% of annual salary for high turnover, low-paying jobs (salaries under $30,000/year), and about 20% of the yearly salary for midrange positions (employees earning $30,000 to $50,000). For higher-ranking jobs, such as the C-Level, meanwhile, it may cost you over 230% of the employees’ annual salary to find a replacement.
There are several factors. According to one insightful article on employee retention by Josh Bersin of Bersin by Deloitte, the key factors are as follows;
You can take steps to prevent your top talent from leaving (or at least minimize your turnover rate). Consider the following;
Before you can even think about stopping your best talent from leaving, ask yourself if you’re hiring the right people. The Wall Street Journal suggests that you interview and vet candidates carefully to ensure that they have the right skills and suitable personal characteristics that fit the company culture, managers, and coworkers. Don’t forget to look at their credit too. Hiring someone who’s more worried about their credit than the job is a significant risk.
The truth is that a lot of employees leave their positions to seek better-paying opportunities. If they feel that you’re not paying what they’d get elsewhere for the same work and skills, they are very likely to quit. Offering compensation packages informed by employee skills and experience, supply and demand, geographical location, and worker seniority would be a good start. But don’t stop there. Offer competitive benefits and additional perks to keep your employees happy.
This goes without saying. When employees feel comfortable in the workplace and enjoy time spent at the organization, they are less likely to leave. Some of the design qualities that make the workplace comfortable include safety, lighting, temperature, and proper ventilation. Aside from that, you need a company culture where employees feel important and wanted. A personal, more authentic culture can help immensely.
Getting new employees up to speed with the rest of the workforce is critical in any employee retention program. Why? Because the right onboarding process makes employees feel at ease – faster. They get into the rhythm quicker and soon feel part of the organization. This makes it likely that they’d want to leave. The process should also include providing them with the right training so they can start delivering faster. This goes a long way to make them feel important to your goals.
This should have actually come at the top of the list. When you’re open with your employees and regularly communicate about the issues affecting them both at the organization and in their personal lives, it’s much easier to retain them. They’ll feel that they can count on the organization to help out whenever they run into challenges (even in their personal lives), and that makes employees want to stay. So, be a good listener and a trusted friend.
This is another crucial area. Employers must consistently recognize their employees’ efforts and reward those efforts as appropriate. Employee recognition not only boosts worker morale but also reassures them of their role within the company. Rewarding them appropriately for these efforts, through vacations, vouchers, bonuses, etc., openly shows the organization’s willingness to go the extra mile to keep them. This public show of commitment could be what makes them stay.
Finally, since employees will always leave, even if only in small numbers, the organization must also put measures in place to identify and, where possible, address the underlying causes of turnover. For instance, you may realize that all the people leaving are going to your close competitor. It’s your job to get to the bottom of the matter, find out what the competition is doing differently, and fix the situation. Exit interviews are one of the best tools to collect feedback to address high turnover concerns.
Turnover and employee retention are currently two of the biggest challenges for HRs and organizations in general. You don’t have to watch as your best talent leave. There are steps you can take to reverse the trend. If implemented well, these steps will boost your retention rates and help create a comfortable environment where employees are excited to work and think less about leaving.