In past blogs, I’ve discussed the importance of a positive work environment and the best ways to retain valuable employees within your organization. Your employees are an essential piece of your organization’s foundation and potential for success. Companies that hold high turnover rates tend to face many challenges, from finding new talent to a significant increase in unnecessary expenses. And while it may not seem like a big deal, those challenges can add up over time.
So, what makes employee retention strategies so important?
It’s Cost Effective
Hiring employees isn’t as simple as just bringing someone new on to the team. Many expenses are considered with regard to hiring including salaries, training and other necessary resources. Taking into account said expenses, it’s much more cost effective to bring on employees that add value to your company and maintain a work environment where they want to stay. Adopting a strategy that assists in retaining employees can easily offset the potential costs of employee replacement, which can often reach up to 60% of an employee’s annual salary.
Boost Company Morale
When an employee leaves an organization, it’s no secret that the morale around the office tends to go down. Your employees want to enjoy what they’re doing and feel comfortable in their workplace. A strong employee retention strategy helps build a positive work environment and often promotes employee engagement and involvement within your company. The more engaged and involved your employees are, the stronger their desire will be to remain and commit to the business.
Increase Performance and Productivity
Facing employees that are leaving, and going through the process of regularly hiring replacements, can directly affect the overall productivity of your company. Consider how long it may take to find a suitable replacement for an employee that leaves. During the time it takes to find a replacement, work is likely not getting completed or is being passed on to another employee on top of their own daily tasks. This ultimately hinders the performance and productivity throughout your company. Organizations that have a low turnover rate and a high retention rate have much higher productivity levels.
Reduce Negative Turnover Rates
A high turnover rate is something many potential employees pay close attention to when they’re searching for a job. Along with factors such as salary, time off, benefits, etc., potential recruits want to know the organization they may work for doesn’t have trouble holding on to their talent. If they don’t see or feel as if the talent is valued within an organization, they may pass on submitting a resume or inquiring about a position.