Today’s workforce is an ever-shifting landscape. Long gone are the days of workers keeping a job until age 65 before walking into retirement with pension in one hand – or so it seems anyway. According to a survey by CareerBuilder, many consider job-hopping an inevitability these days.
The truth, however, is that many employees would love to stay with a single company, if given the proper incentives. For them, choosing to stay or not may have a complicated answer. But as employers, the reason for keeping them is simple: profit. But there’s a very valid reason why you should never overlook your employee retention strategies.
Good Employees Bring a Lot to the Table
The value of a great employee cannot be stressed enough. But what makes an employee great? Studies by the Temkin Group and Demand Metric found the following about highly engaged employees:
- They are 2.5x more likely to finish something that needs to be done – after normal work hours
- They're over 3x as likely to do something good for the company that's not expected of them
- Organizations with over 50% employee engagement retained over 80% of their customers
These numbers are nothing to sneeze at. The bigger picture that they paint is this: companies who manage to hold on to talent and keep them engaged are able to maximize efficiency, reap profits, and gain serious intangible benefits along the way.
They Also Take the Table When They Leave
In 2014, 83% of employees surveyed by salary.com said that they would be looking for new jobs. As managers, this should be alarming! SHRM finds that the total costs of replacing employees range from 90% to 200% of their annual income. Those are stark numbers for any organization to face.
Finances aren’t the only thing employers should be concerned with either. AARP notes that potential indirect costs include:
- Lost productivity
- Low employee morale
- Cost of formal and informal training to get new hires up to speed
- Costs for advertising and promotional materials, referral bonuses, relocation expenses, and background checks
While all of the above points are valid, one that is often overlooked is the effect high turnover can have on your remaining employees. When an employee leaves, it creates a burden on their peers, who have to pick up their workload while waiting for a replacement to come in and get up to speed. This can lead to low morale and may cause the remaining employees to look to quitting.
Despite the high cost of employee turnover, the battle is far from a lost cause. Consider these stats from EdAssist and the American Management Association:
- 83% of millennials would stay with a single employer if they did things like invest in their development
- Out of 1200 executives and managers, only 34% target developing and retaining current employees
This is maddening when you consider that employees aren’t actually valuable to a company’s bottom line until after a lengthy period of training and adjustment. Why lose out on productivity and the potential gains of valuable employees, while incurring the costs of losing them? In layman’s terms, it doesn’t make any sense.
Employee retention is a big deal when it comes to your bottom line. You need to make sure you’re doing your best to find out what your workers need from you in order to keep valuable members of your team engaged and committed. With the right management structure and retention strategies in place, you have all the tools necessary to keep your top performers. At the end of the day, that’s good for you, good for your employees, and good for business.