Why Employee Retention is Important & How to Improve It
High employee turnover is costly long-term and can negatively impact your business in more ways than you might anticipate. During a period of time being dubbed “The Great Resignation”, it’s never been more important to look after your existing employees. In September 2021 4.4 million Americans left their jobs and there were 10.4 million job openings, surpassing pre-pandemic levels. Showing that people are leaving positions, confident that they will be able to find other suitable employment. We’ve gone from being in a candidate-rich market, where employers hold all the cards, to the reverse. Add to this the fact that employees returning to the office are feeling disappointed, and you begin to appreciate the importance of employee retention. So what can you do about it?
Start On the Right Foot
One of the easiest ways to improve employee retention is by starting their time with your company in the right way. Good interview and onboarding experiences directly impact
retention rates so it’s important to put candidates at the center and give them the best experience possible. If you have traditionally had a long interview process involving multiple managers carried out over several days, consider whether you can condense this down. Once they’ve accepted your offer the next step is onboarding. It’s beneficial to assign them a mentor from their team to explain how things work and answer any questions they might have - this could be their manager but ideally would be a peer. The idea behind assigning a mentor is that it helps them get orientated faster and allows them to quickly develop relationships within their team. While it may seem like a small thing, organizations with a good onboarding process can increase retention by 82 percent and productivity by 70 percent. There’s a reason you hired that person and your onboarding process could be the difference between whether they stay with you for months, years, or decades.
Keep Skills in House
One of the biggest benefits of improving employee retention is that you get to keep all the skills of your current workforce. When people feel valued their loyalty increases, and loyal people tend not to be interested in looking for a new job. Hiring new talent can be a costly process - factor in time away from money-making activities, the cost of using a specialist recruitment partner, the potential loss of customers who aren’t being serviced while you’re trying to fill the sales position, the cost of the advert itself, and you begin to see why it makes sense to keep your existing talent happy. According to a study by the Society for Human Resources Management, it costs six to nine months of an employee's salary to find and train their replacement. It can then take months for the new hire to become profitable, all the while eating into your bottom line. A good way to ensure you keep talent in-house is by conducting “stay” interviews - we’re all familiar with exit interviews, well “stay” interviews are carried out with long-term employees. They’re great for discovering what it is that makes them enjoy working for you and what they feel could be improved. Once you’ve conducted the interviews it’s important to act on the information.
It’s Good for Business
A major benefit of employee retention is client retention. Replacing your existing talent is costly in more ways than one - while you’re spending time and resources finding a replacement, who’s looking after their clients? By keeping your talent happy, you keep your clients happy too. Happy employees not only stay longer, but they also attract other top talent. If your company has a reputation for treating employees fairly you’ll find it easier to grow the business because you’ll have your pick of the talent. This is because employees tell people within their network what it’s like to work for you, in particular those looking for a new role. So, if people are happy at your company they’ll be giving you glowing reviews.
High employee retention matters, not just for overall employee happiness but also for your bottom line. If you’re serious about employee retention we can help you find talent that stays, get in touch for more details.