Employee retention strategies are essential to the ongoing success and profitability of any business, small or large. Why? Well, happy and productive employees create an environment that is conducive to growth, while loyal employees can help you save time and effort in recruiting and training new staff.
Recruitment is expensive. Training new employees takes its toll in terms of time, productivity. Conversely, the job security tenured employees feel helps boost morale, which makes it more likely they will recommend the organization to talented people outside the company. This fuels a virtuous circle.
High turnover rates means fewer experienced employees, which decreases the productivity and quality of work. It also leads to decreased customer satisfaction and loyalty, missed business opportunities and a weakened competitive advantage.
Employee retention also helps businesses foster better relationships with their employees, which leads to improved morale and job satisfaction. This, in turn, boosts productivity, creativity, engagement and motivation among employees.
Studies have found that when employees are highly engaged, they are more likely to remain at the company, thus reducing turnover, and that retaining current employees is more effective than bringing on new ones.
What is employee retention?
Employee retention is the ability of a business to retain its employees over a long period of time. It is essential for businesses to retain top performers, as they bring to the table unique skills and experience that can’t be found elsewhere. Talent that walks out the door will need to be replaced, and this process comes with significant costs.
Why is employee retention important?
- Employee retention helps build the team.
Employees that have been with the company for a while understand how things run and can be a valuable resource. They build relationships with their peers and help foster an environment of collaboration, which in turn helps the company run more efficiently. - It has a direct impact on profitability.
"Entry-level employee turnover can cost businesses between 30-50 percent of the employee’s annual salary; 150 percent for mid-level employees, and you’re looking at 400 percent for high-level or highly specialized employees."That’s why it’s imperative that businesses do whatever they can to ensure their top talent sticks around.
- Employee retention helps to improve morale among existing staff.
When a company is losing people left and right, it can feel like the ship is sinking. Losing employees may make the remaining staff question their decisions to stay, and it also makes it difficult to build a sense of camaraderie. - Finally, it helps to boost productivity.
Studies have shown that employees who stay with the same company tend to be more productive than those who hop around. That’s because they become familiar with the systems, processes and even the culture of the organization. This gives them an edge that can help the company save time and money.
Employee retention benefits
Thus, here are five tips about how to best go about retaining staff members:
1. Hire Right People From The Start
Retention of staff starts with making sound hiring decisions from the beginning. A manager should identify individuals who demonstrate the desired qualities to fit their role and organization. Potential candidates should possess the necessary qualifications, such as technical know-how, to perform the job's duties. Furthermore, it is important to look for other competencies and intangibles that might add value to the position. Soft skills such as collaboration, team-building, problem-solving, communication, and a commitment to lifelong learning could be helpful.
Moreover, it is important to discern whether each candidate is going to be someone that the organization wants to stay with long term. How would the jobseeker fit into the existing team dynamics? Is this person likely to stick around? Thorough background checks and conversations with references can help to confirm that the candidate is the right fit in terms of attitude and aptitude.
2. Offer competitive pay and benefits
It’s important that your employees know that their work is valued. Offering competitive pay and benefits is one way to demonstrate that. Studies show that employees are more likely to stay with a company if they feel like they’re being compensated fairly.
3. Invest in employee development
Employees want to feel like their skills are being used, and they are expanding their knowledge. It is important to offer opportunities for employees to learn and develop. Investing in employee development and offering access to professional development programs can make employees more engaged and more likely to stay with a company.
4. Foster a positive work environment
Employees who work in a positive environment will be more likely to stay put. Make sure your employees can share their thoughts openly without fear of judgment or repercussions. Ensure that your team feels comfortable in their work and are able to enjoy themselves.
5. Show appreciation for your employees
According to a Gallup poll, managers who show appreciation for their employees are more likely to have higher retention rates. Let your employees know that you appreciate their work and dedication. Arrange team-building events or offer rewards and recognition to demonstrate how much you value them.
6. Encourage open communication
Communication is key to a healthy workplace. Make sure employees feel comfortable expressing their thoughts and concerns to their colleagues and managers. Encourage open communication between departments and among team members to make sure everyone is clear on their roles and responsibilities.
Your team is the core of your business, and investing in employee retention strategies can help you hang on to the best employees and attract new talent. These strategies can help you create a positive work culture and keep your team engaged and productive.
