Employee retention – the art of holding onto your talented employees. To do this successfully, you need to invest in your business – and in your employees – to encourage people to stick around. Make your workers feel a connection to your business. You can do this by making them feel valued, and offering new opportunities for growth.
Why is all of this so important? According to a recent survey of 2,000 employees, 43% said they were wanting to find a new job. That’s a shockingly high figure, particularly when translated to your company. Nearly half of your employees may be looking to leave, meaning you have to bring in people to replace them. Needless to say, this could have significant consequences for the rest of your organization.
On that note, here are some critical reasons that employee retention is far more important than you might think:
1. Replacing employees costs a lot of money
Did you know that the average cost of losing an employee is around 33% of their annual salary? That’s a significant amount of money – now, imagine losing more than one employee, at various times in the year. It eats into your budget, meaning your business loses more and more money.
Why is it so expensive? It’s simple, you usually have to give some type of severance package to employees that leave, and you then have to pay to advertise the job, pay for training, and suffer a dip in productivity as the new person settles in.
If you retain your employees, you can save these dollars – and in a fickle economy, this is vital.
In turn, you can use the savings to invest back into your company and improve growth and success. When your turnover rates are high, it’s almost impossible to grow.
2. You may lose employees to your biggest rivals
What happens when someone leaves your company? More often than not, they look for a similar job in your industry. Therefore, their attention turns to your biggest rivals. You can lose some of your most talented employees to your competitors, which benefits them and negatively impacts you. Not only are you struggling to replace your employees, but everyone around you now has new talent on their books – with insider knowledge of your business practices. It will undoubtedly lead to setbacks as your rivals surge ahead of you.
There are many reasons someone can quit their job and move to a rival company. 79% of people who leave their role state that a lack of appreciation was the main reason. They don’t feel valued, so they want to find a place that will actually appreciate their talents. So, to retain your employees, focus on making them feel valued and appreciated at all times.
3. A lack of employee retention decreases company morale
How do you think the rest of your employees will respond to poor retention rates?
Firstly, it’s hard for them to work efficiently if there’s a new team member next to them every two months. But, more importantly, it’s incredibly demoralizing. When everyone is jumping ship and leaving, it brings down company morale. Your remaining employees start to question their roles, and it can create a toxic culture in the workplace.
Instead of everyone working together and being a team, people start to lose interest and lack motivation. They may feel like the business is going down the drain, which will negatively impact performance. Plus, as a result of the bad culture from the lack of morale, it’ll mean more people leave.
When everyone is down in the dumps, you can’t expect to achieve anything until this problem is sorted.
(Recommended Read: How You Can Improve Employee Morale)
4. Your company needs experienced employees
You can often draw similarities between businesses and sports teams. The most successful sports teams have a blend of fresh blood and experience. The rookie players are hungry and have new ideas, but they need experienced heads to keep them in check and provide guidance. The same goes for your business; you need to have experienced employees to ensure that you keep moving in the right direction.
An experienced employee will know your company inside and out. They understand how things are done, they know how to communicate with clients. They can offer advice on how to improve things around the organization. They are incredibly valuable as they can boost productivity and performance.
But, how will you get experienced employees when your retention rates are so low? You just can’t, and this makes it tougher for you to run your business and build trust with your team members.
So, focus on keeping people in your company so that they can gain experience. Studies show that 93% of employees would stay at a business if they saw a clear career investment. If you want to see the benefits of experienced workers, then you need to invest in them!
5. Employee retention boosts your reputation
The public perception of your company can be altered by employee retention. An inability to hold onto employees makes people view your business negatively. If customers keep dealing with a new person all the time, then it makes them wonder what exactly is going on at your company. Why can’t you hold onto staff? How is this business being run if everyone keeps leaving?! Plus, it makes it harder to establish relationships with customers, further damaging your image.
On the other hand, retaining your employees will boost your reputation. It makes you look more professional if you keep a team together for a long time. When the same people interact with the same customers, it builds a rapport between them, improving the way people perceive your business.
The fact is that employee retention says a lot about your company. A terrible retention rate leads to significant losses – both financially and performance-wise. But, a positive retention rate can boost your company, improve productivity, and establish a happy culture.
As a consequence, you should devote a lot of time and resources to retaining your staff. It all starts with you; almost 50% of employees quit their jobs due to bad managers/supervisors. Improve the way you interact with your employees; make them feel valued, open up avenues for career progression, and establish a culture they can buy into. This will help you hold onto your talented workers and run a more successful company.
Want to learn more about what you can do to create a stronger team? Need to boost morale and motivation within your company? Contact the experts at MTI Events to create a customized incentive program and plan team building events for your employees and take a step towards greater business success.