Employee retention is a big topic of conversation at the moment in the corporate world and with good reason too. More and more companies are seeing valuable employees stay for shorter and shorter periods of time due to the fast-paced nature of the modern age.
With opportunities for young professionals coming left right and center with startups, travel and entrepreneurship appearing as the sexy, appealing goal of so many – how important really is employee retention?
To answer this, we’ve split the question into three main parts:
The cost of turnover
Forbes recently have been quoted stating that for entry-level employees, mid-level employees, and highly skilled-level employees, the associated turnover costs come to 30-50 percent, 150 percent, and 400 percent of the annual respective salary of employee. That’s an insane percentage for losing out on employees and having to rehire.
Within the US, companies have reportedly spent $160 billion per annum just on employee turnover. It’s therefore no surprise that it’s always cheaper and more beneficial to retain employees in the macro for employers.
Experience and capability
It almost goes without saying that an employee that has been with a company say 15 years is going to be more experienced and capable in that specific field than an employee of say 2 years. That makes that employee that has been with the company more valuable, they’re better at their job. Not because they’re smarter, or more technically adept – but because they’re likely to know the business inside and out – know what to do in specific situations and are likely to know the predicted outcome of operations.
Holding onto these employees is vital as their work will be more efficient, the experience will cause less mistakes, have a better sense of what is required and will often act as a senior figure to younger employees. They not only play a role in the workforce, but often as a valued colleague to other employees. They are vital to operation.
Loyalty programs – not just for consumers
We think it’s safe to say that with a more cost effective, higher experienced and efficient employee – you’re going to be happier. So how do you retain an employee and avoid the headache and financial burden that is retraining and rehiring? Loyalty programs.
Loyalty programs exist for consumers in so many places – so why not for employees too? It can be as simple as a small incremental pay rise as time goes on or as glamorous as expenses paid trips and travel for continued employment as a company.
Our advice is to combine as many corporation perks and benefits as you may see fit for ALL employees with a further loyalty scheme for employees when they begin to get time under their belt. Nobody wants a watch after 25 years of service, they’ll just keep staring at it until their shift is over. But focus on actual, rewarding and exciting benefits with goals and milestones to look forward to and encourage.
With a perfected strategy in place, you’ll be seeing a lot less turnover and a whole lot more retention!