Employee retention is so important.
It’s much harder to have to hire, on board, and train new employees than it is to work hard to keep your current employees, especially the all-stars.
Having employees that are engaged will obviously make people less likely to want to quit, and will improve your retention rates.
A lot of the things we talk about in order to increase engagement are so simple, and often free, so they really shouldn’t be an afterthought.
You want people to enjoy coming into work, knowing they’re getting paid fairly, and are well-respected by their peers.
As a manager it’s up to you to create that type of environment for employees, since it will have an effect on your company’s bottom line.
There are serious financial, and non-financial costs to employee turnover.
The financial costs are hard to estimate, because there are so many factors, and I’ve read so much different research on this, but a good estimate is around 25% of an employee’s salary.
Another reason it’s so hard to estimate is because of all the un-measurable things, which I think are more damaging to someone leaving.
For example, if someone leaves, and another employee has to help out, that’s time lost doing whatever they were doing before, which is lost productivity.
The emotional damage that it does to the rest of the team is also important to mention.
It’s hard to measure, but even if it’s for a brief period of time, there is a drop in engagement across the entire team when one of their coworkers leaves.
They might start to spend a considerable amount of time worrying about their own jobs, distracting them from their work.
If there was ever any doubt into whether employee engagement played a role in retention, here are 8 statistics that clearly show how improving employee retention affects the bottom line.
- Morrison Management Specialists reduced turnover by 1 percentage point for every 2 percentage points gained in employee engagement
- Unnamed Fortune 100 manufacturing company reduced turnover from 14.5% to 4.1%, while absenteeism dropped from 8% to 4.8%
- Employees with lower engagement are four times more likely to leave their jobs than those who are highly engaged
- 66% of highly engaged employees reported that they had no plans to leave their company
- There is a negative .43 correlation between a company’s level of employee engagement and their voluntary turnover rate
- Highly engaged employees were 87 percent less likely to leave their companies than their disengaged counterparts
- Study of 23,910 business units compared top quartile and bottom quartile engagement scores and found that those in the bottom quartile averaged 31% – 51% more employee turnover
- Engaged employees are 87% less likely to leave the organization than the disengaged
How To Improve Retention
Maslow’s hierarchy of needs can help you understand what you need to focus on.
The first thing you need to make sure of, is that you’re satisfying their basic needs like job security, health benefits, and fair pay.
Once you do that, you should focus on things like their sense of belonging, and how they can grow within a company.
1. Pay Them Fairly
Employees need to feel like they are being properly compensated in exchange for the work they are doing for you.
If they do feel like they are properly compensated, they will be happy, and should have no reason to leave. This is what’s known as equity theory.
2. Frequent Feedback
Feedback is important to all employees.
You should be having regular feedback sessions (ideally weekly) with your employees to make sure the are constantly improving.
Use these feedback sessions as a way to fix any issues that have come up.
3. Exit And Stay Interviews
This is sort of related to the last one, but it’s really important to be constantly collecting feedback in order to improve.
If an employee is leaving the company, conduct an exit interview to find out why they’re leaving, and what you could have done better.
But don’t wait until they already are leaving, conduct a stay interview to find out why your employees stay.
Ask them what makes them choose this job over another, and use that to your advantage. It’s also a good opportunity to find out what could be done better.
How Would You Improve Employee Retention?
Any other ideas you can think of? Let me know in the comments!
This article was syndicated from Business 2 Community: 8 Facts On Employee Retention That’ll Keep You Up at Night
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