There are several reasons why employee retention matters. High levels of employee turnover impact:
Employment rates in many parts of Europe and North America are at the highest levels in more than a decade, making it difficult for businesses to keep their talent pool. More concerning, studies of Millennials at work show many plan to leave their job within two years. This may have a significant impact on your business.
Company bottom line: although most businesses don’t track this cost, studies show that replacing an employee that was performing to a good standard can cost the business 150% of their salary to replace.
Knowledge base in the company: employees who leave a company, particularly after a prolonged period of time take institutional knowledge with them. This will make your business, at least temporarily, less efficient. Research by HR Daily Advisor showed 42% of the skills to correctly perform a role are only known to the person in that role.
Performance and moral: if many colleagues are leaving, remaining employees may begin to feel more insecure and less motivated. Performance levels are likely to be impacted by former employees leaving and new employee onboarding.
However, further studies indicate if millennials are engaged at work, 64% are unlikely to switch roles in the next year, even if the job market improves in their area. So, key to employee retention is building and maintaining engagement as early as possible.
Retaining employees begins with hiring the right people to begin with. Ensure new hires have the skills to do the role and are also a good cultural fit for your company. To assess if they are a cultural fit, ask behavioural interview questions like:
These kinds of questions should indicate whether the potential employee takes a similar approach to their work as others in your business, allowing you to hire the most suitable person.
‘People follow leaders, while they abandon bosses’ this is important to remember. Empower managers in your business to lead their employees. The best leaders will do a combination of the following:
Ensure you conduct exit interviews with everyone before they leave and probe for the real reason they are departing. Was it truly better benefits? Or did they not feel they fit in well with their team? Did they get offered a better role? Or did they not feel valued by your organisation? Getting to the real answers is key to resolving high employee turnover.
Away from the big-ticket items, there are small ways to improve organisational culture and make employees more likely to stay:
1. Social Club
Provide a budget for a social club to arrange employee entertainment, socialising together will help teams to build stronger relationships.
2. Casual Fridays
If you work in an industry where formal wear is required most of the week, see if Fridays or the last day of the week in your country, can be a little more relaxed?
3. Office games room
If you have the space, can you add a games room where employees can let off some steam in a relaxed environment. Pool and table tennis tables are popular options.
Whatever combination of benefits you choose, ultimately employees who feel they are a valued part of your business are more likely to remain for the long haul.