How Employee Retention Affects Business
Finding top talent in a competitive market is strenuous enough, but retaining and keeping them happy on your payroll is another challenge altogether. Retaining key employees is crucial to the long-term health and success of your business. Managers will readily agree that keeping your best employees result in numerous benefits such as customer satisfaction, increased product sales, happy colleagues, effective succession planning and organizational knowledge.
Let us first look at some reasons why employees leave organizations. Most of the time, these reasons may be unknown to their employers. According to a renowned strategic planning consultant, there are a 6 main reasons why employees leave a company:
The expectations that employees have of their job or workplace are mismatched.
There is little guidance and feedback.
There are limited growth and advancement opportunities.
Employees do not feel recognized.
Employees feel too stressed and suffer from a lack of work-life balance.
There is a loss of trust and confidence in leaders.
In previous articles, we touched on how detrimental a high turnover rate can be for a company. You can read it here or here. Recruiting and training a new employee can cost an excessive amount of time and lost in revenue. Let’s quickly take a further look at some facts and figures provided by a staff retention and consulting services company.
Over 50% of newly recruited people will leave the organization within 2 years
One out of four new hires will leave within 6 months
Almost 70% of businesses have difficulties replacing staff
Around 50% of companies experience regular problems with employee retention
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Employers need to listen to employees’ needs and implement retention strategies which will have a significant and positive impact on an organization’s turnover rate. Here we’ll take a look at some of these strategies.
Instill a positive company culture
A company should establish a series of values as the basis for culture such as honesty, attitude, respect, and teamwork. A company that creates the right culture will have an advantage when it comes to attracting and keeping good employees.
Provide growth opportunities
Remember that exemplary employees want to learn and grow. A career-oriented, valued employee must experience growth opportunities within your organization to realize their potential. Employees are more likely to stay engaged and be committed to an organization that makes investments in them and their career development.
It’s critical for companies to give feedback and coaching to employees so that their efforts stay aligned with the goals of the company and expectations from both sides are met. During an employee’s first month on the job, an employer should provide intensive feedback. After which, employers should continue to provide formal and informal feedback to employees.
Make staff feel appreciated
Frequently saying thank you for a job well done goes a long way. Monetary rewards, bonuses and gifts have terrific motivational power, especially when given as soon as possible after the achievement. Even something as simple as a free lunch can make employees feel valued.
When work-life balance is structured properly, both the employee and employer will benefit as the employer will experience more productivity because employees will be less stressed, healthier and thus, more productive. Allow employees the chance to catch their breath with the help of team-building activities. Encouraging employees to enjoy activities outside work communicates that you really do want them to strike a healthy balance.
Provide quality management
People leave companies because of managers and supervisors more often than they leave because of their actual jobs. The words and actions of employers have to match to build trust and confidence among staff. Additionally, employers need to engage and inspire employees; one way will be to get rid of the authoritarian style of management.
It is essential to note that a long-term commitment requires effort in both directions. While it’s fully understandable that most organizations look skeptically at perpetual “hoppers,” remember that if you expect and hope that employees will make and keep long-term commitments to your company, it will be equally vital that you give them good reasons to stay. Employees are much less likely to leave and turnover costs will be kept low if the above strategies exist in the workplace.