Employees are the foundation of any business; they contribute directly to an organization’s success and the culture of the workplace. While many companies feel the need to hire and train new employees, it’s important to remember that without a high rate of retention, these hiring efforts can do more harm than good. By focusing on retaining valuable employees, an organization can not only maintain a strong workforce, but also see benefits in other areas such as increased revenue, productivity, and quality of service. In contrast, organizations with high turnover rates generally experience the opposite – and can see substantially negative effects:
Decreased Workplace Morale
One major result of an organization with a high turnover rate is lowered employee/workplace morale. When a company has employees that are consistently unhappy, resulting in frequent resignations, it can directly affect how those who are still working there view the organization and management. Additionally, high turnover generally results in increased workloads and responsibilities for existing employees. They may need to cover work and duties in areas where they might not be as familiar; resulting in frustration and decreased productivity.
Costs, Profitability & Revenue
Anytime a company is going through a hiring process, there are costs and expenses that need to be taken into consideration. From recruiting processes to training programs, the costs that come with hiring new employees can add up quickly. Things such as advertising for open positions, recruitment related tasks, drug screens, background checks and extensive training programs are all essential when hiring, and if you’re losing out on the employees that you invested in, you’re taking a major hit on your expenses. When an organization is increasing costs (recruiting, hiring, training, etc.) and decreasing productivity and revenue, it’s likely that the overall profit is decreasing as well.
Loss of Experienced Employees
Well trained and experienced employees bring great value to an organizations success. They have gone through the necessary training, usually know the ins and outs of the company and how everything works, and are generally high-level performers in their positions. When you lose employees that hold such experience, you are losing out on a critical part of your company’s success.
A business’s success is a result of many different contributing factors. However, without having a strong employee foundation, an organization is likely to experience different struggles that can result in major setbacks and financial issues.