Here in Tennessee, and in fact, in most states, it costs almost 20% of an employee’s annual salary to replace that employee. That said, if you are experiencing high turnover in your business, you are probably also experiencing high losses.
The cost of reviewing applications, processing candidates, conducting interviews, training and purchasing equipment for new hires, and possibly even signing bonuses, aren’t only monetary—they also cost time, lost productivity, and knowledge loss. Given the high cost of losing an employee, employee retention should be one of the top priorities for every business and organization. If you do not already have a retention strategy, now is the time to make one. The first step in curbing turnover is figuring out why employees are leaving.
Why Employees Leave
Employees leave organizations for a variety of reasons, depending on their unique circumstances. However, there are some common reasons that may help determine the best retention strategy for your organization. Below are some of the most common reasons employees leave:
Stagnation—Employees are often looking for career and personal growth. If they have no upward mobility at your company, they may look for it elsewhere.
Pay—Compensation needs to be competitive to attract the best talent. Likewise, good pay is needed to retain top talent.
Workplace Culture—Expectedly, coworkers matter to employees. If an employee feels either ostracized, marginalized, or looked down upon by coworkers (or management), they will want to leave that environment.
Better Opportunities—Not unlike stagnation, employees sometimes leave when they believe they have better prospects elsewhere. This could be due to a higher-paying position or simply a job more aligned with their interests.
How to Retain Employees
Retention strategies are not universal. It is possible that techniques and strategies that work for some organizations will not work for yours. This means you need to analyze why your employees are leaving and strategize how to combat those reasons. Exit interviews are a great way to analyze why employees are leaving. During exit interviews, managers can ask questions of employees who are on their way out of the company. Questions should be related to the employees’ time with the company, such as what they enjoyed, what they disliked, and what prompted their resignation. Exit interviews will only be useful with employees who resign or leave voluntarily, not those who have been terminated. Depending on the responses from the exit interviews, you can begin crafting a retention strategy. For instance, if one of the main catalysts for employee turnover is a lack of upward mobility, think about how you might change that. It could mean creating new roles or, if roles already exist, making a clear guide for career pathing at the organization. Creating a retention strategy does not need to be solely reactive, for instance, you could consider creating a survey to gauge employee satisfaction within the company. Include questions about what people like and do not like about their job.
There are no hard and fast rules for successful employee retention. Creating a retention strategy for your organization requires you to analyze both your company and the related industry. Contact your local Builtwell Insurance Agency at 423-668-4888 for more information on retention and for materials to help you craft your strategy.