Strategies to Improve Employee Retention
If you think all an employer needs to do to retain top talent is to dole out an occasional perk or nominate a high performing staff member for employee of the month you’d be missing the deeper implications of the subject. Retaining the best talent is a complex, many-faceted challenge that can negatively impact an organization’s productivity and profit margins if it isn’t taken seriously or addressed effectively.
To properly assess its impact on your business, employee retention should be examined in the most comprehensive way possible. Knowing how best to retain employees will be beneficial in the stability of your company. Often, company leaders stick to examining attrition rates—which are important—however, such data simply identifies the problem rather than solving it. Therefore, when it comes to employee retention, all the issues that come into play need to be assessed and corrected. For instance, it’s vital that the true cost of losing a good employee is determined in order to calculate the real effect low retention has on the company’s bottom line. It’s also important to acknowledge that the considerable cost of recruiting someone to replace a departing employee isn’t the only expense involved. There is also a loss of productivity that occurs during the period of time a new replacement spends learning how to perform their job at optimum levels. And the negative impact a departing employee may have on your business may begin well before the day they leave. Even top talent can become de-motivated if issues important to their wellbeing are ignored. Once that employee decides to start searching for another position they may be less productive from that point forward.
Losing a good employee can easily de-motivate other employees as well. And ultimately, even in a down economy, when word gets out that a company has high attrition rates, its reputation can be damaged and its ability to attract top-level talent may be compromised as well.
How to improve employee retention
Although the things that motivate one employee to stay with a company may be different from those that attract another, several recent studies reveal that there are some universal benefits a company can provide to raise its retention levels. For instance, a survey conducted by Society for Human Resource Management (SHRM) and CareerJournal.com revealed that the top reasons that employees would be motivated to start looking for another job were:
- 53 percent for better compensation and benefits
- 35 percent for better vacation and holiday benefits
- 32 percent because they were ready for a new experience
Add to these results the fact that another recent survey revealed that 68% of employees believe benefits are more important than salary, and it doesn’t take much of a leap of faith to conclude that a robust employee benefits package may be something to consider if a company is looking to motivate employees and improve retention rates.*
Survey, survey, survey!
Compensation and benefits are certainly powerful motivators but it’s important not to forget the emotional needs that employees have. This is vital when examining employee retention strategies. The satisfaction that someone derives from their work—along with the appreciation and acknowledgment they receive from their co-workers and supervisors—can have an enormous impact on whether they decide to stay or leave a company. The challenge for the employer is to determine the kind and character of emotional rewards that will resonate with his or her employee base. Because they can vary depending on the job function of the employee and industry category they are working in, confidential surveys can provide actionable insights that are specific to the company at hand.
Improved retention means increased profits
SHRM has estimated that it costs $3,500.00 to replace a single employee earning $8.00 per hour. If you multiply that amount by the 27 percent of employed adults that are currently looking for jobs outside of their current company, the true cost of employee attrition becomes apparent.** When the financial impact is revealed, it’s easy to understand why it just makes good business sense for leaders in nearly every business to work toward establishing employee retention strategies that are ongoing and continually evolving. Such efforts can increase both the stability and the bottom line of the organization.
Learn more about how TriNet can be your strategic HR partner. Contact us today.