If your business doesn’t have an employee retention plan, it should. Keeping employees around for the long-term means larger profits, increased productivity, and a more stable workplace.
In most industries, the employee retention rate is about 90%; meaning 10% of employees are leaving. This is a good number to aim for. If you aren’t there yet, that’s okay. There are steps you can take to keep your employees around.
Benefits of Employee Retention
There are many benefits to working towards a high employee retention rate.
- It’s expensive to find new talent
Not only is it a hassle to find new employees, it is also expensive. It can cost about 33% of a person’s salary to replace them. Advertising, interviewing, and onboarding add up quickly. You can avoid these recurring costs by making sure your employees want to stay. Decreased costs for recruiting means an increase in profits.
- Increased morale
When an employee leaves, it is a sure bet people are whispering to each other, wondering why. If your business has a high retention rate, employees will be confident in you, as their employer. Less turnover also allows more trust between employees and with management because relationships can develop over time.
- Higher productivity
Companies with higher retention rates tend to have more engaged employees. This means higher levels of productivity and major benefits for your business, like high employee confidence, better customer service, and increased profits.
How to Increase Employee Retention
Looking at the statistics, there are benefits to employee retention. There are many things that employees value, but these are some of the most important factors in making sure they stay for the long-term.
Respect for Management
Having respect for management plays a large role in employee retention. According to a Gallup poll, 50% of people who quit a job do so because of a negative relationship with their manager. That means 1 in 2 employees leave because of ineffective management. So, making sure you have programs to evaluate management effectiveness can play a large part in employee retention.
Professional Development
Internal and external professional development opportunities can help boost employee retention rates. When 1,433 full-time employees were surveyed by The Harris Poll and Instructure, 70% of employees said they would consider leaving their current employer if another opportunity had better professional development opportunities. Creating an internal training program is an effective tool, but you can also offer external learning endeavors to increase employee satisfaction.
Boost Morale
Employee burnout is real, and 1 in 2 employees leave because of exhaustion, according to a Forbes report. Considering Americans spend an average of 40% of their life at work, this is no surprise. Making an effort to ensure employee morale stays high can help with retention. This might include having non-work activities like team building or a happy hour. Consistent surveying of employees to gauge their feelings about their workload can also help identify a decrease in morale before it leads to people leaving their job.
Recognition
Employees want to be recognized for their efforts. A Bonusly survey with SurveyMonkey showed that 63% of employees who feel their company recognized them are less likely to look elsewhere for a job. People want to feel like their work is meaningful, and recognition helps reinforce this feeling. An official recognition program is the best, but even informal recognition can help employee retention.
Overall, evaluating your retention rates and taking steps to make sure your employees are satisfied can have immeasurable benefits for your business.
Sources:
Work Institute. Work Institute 2017 Retention Report. Accessed June 21, 2022.
Gallup. The No. 1 Employee Benefit That No One’s Talking About. Accessed June 21, 2022.
Instructure Bridge. How to get today’s employees to stay and engage? Develop their careers. Accessed June 21, 2022.
Forbes. Burnout Is Sabotaging Employee Retention: Three Things You Must Know To Help. Accessed June 21, 2022.
SurveyMonkey. Can employee recognition help you keep them longer?. Accessed June 21, 2022.