Written by Simon Benford-Blows
Many studies provide monetary figures directly associated with staff attrition and the cost and impact on business for instance in the US it can be over $1 trillion, and, in the UK, figures suggest the cost per employee is circa £11,000 per head just based on the national average UK salary (significantly higher for specialists and professionals). It has been forecasted that millions of people have quit their jobs over the last 12 months in order to find something else directly as a result of the covid pandemic and the way they have been treated in their current employment.
So, why are these figures so high? When employees leave a company there are a number of direct as well as hidden costs to account such as:
- Time and money to replace the employee (including recruitment and onboarding of new talent)
- Lower morale for employees left behind
- Reduced productivity during hiring and onboarding stage
- Lost expertise and company knowledge
- Time to get new employees integrated, up to speed and positively impacting the business
In fact, replacing an employee can cost from one-half to two times the employee’s annual salary. However, companies who keep their employees longer, see benefits beyond hiring and training costs.
For example, employee retention leads to:
- Better customer experiences
- Consistency and momentum across teams and the organisation
- Stronger company culture (which supports employee engagement)
- Increased revenue streams
Interestingly studies have found that when turnover is low and engagement is high, companies can more easily attract the right talent for a role within their business. In other words, it’s in your organisations best interest to take care of your employees and find ways to boost retention, inclusiveness and engagement at every opportunity.
So, what causes employee turnover?
A few common reasons for voluntary turnover include:
- The employee is approached by a company and is offered a better job
- The employee no longer wants to work for their current company
- The employee has been actively searching for a new opportunity and gets a job offer
Some causes for involuntary turnover include:
- Poor performance, due to being the wrong hire or a lack of training
- Violating employee guidelines
- Creating conflict in the workplace
Your organisation should always strive to lower its turnover rate. Ways to decrease employee turnover include improving your workplace and investing in better hiring and training processes. Offering remote work or flexible work schedules has also been shown to decrease turnover by 25%.
Here are just a few of the ways to assist in your staff retention.
Get your recruitment strategy right.
It’s so important that companies invest in the right hires from the start. To avoid mismatches in skills and role responsibilities, communicate your expectations clearly and pay attention to possible misalignments in experience and culture. Failure to do so means significant costs in restarting the hiring process within a short period of time
Optimise the onboarding experience.
Your onboarding process should be strategic and “last at least one year to ensure high retention”
- Reinforce a positive first impression
- Set clear expectations for their work and future at the company
- Communicate what to expect over defined timescales e.g., the first week, month, quarter etc
- Connect new hires to the team and business, in general, to help them build relationships with co-workers, colleagues and management
- Enable structured review periods on their job, company processes, and culture
- Start planning for their long-term future and development within the organisation
Create a culture of recognition and feedback.
Employees want to feel valued and appreciated for their contributions. Building a culture of feedback and employee recognition can go a long way to helping employees feel seen and heard—and less likely to seek that validation elsewhere.
Here are a few ways you can build recognition and feedback into your company culture:
- Practice continuous listening—use annual and pulse surveys to gather employee feedback.
- Hold regular one-on-ones with employees—review performance together often, offer (and ask for) feedback, and discuss career development with employees.
- Create an employee recognition program—Build recognition into your culture through peer-to-peer recognition, public and private praise from managers, and company awards or shoutouts.
Provide ongoing education and clear paths to advancement
Promoting from within not only provides a clear path to greater compensation and responsibility, but it also helps employees feel they’re valued and a crucial part of the company’s success. So, employee development and education are essential.
Stick and encourage remote work options
If nothing else the pandemic has demonstrated that long-term remote work is possible and from a recruitment and retention perspective providing increased flexibility for work hours and location of work help increase employee satisfaction, which leads to retention, along with increasing an employer’s competitiveness and attraction to land top talent. Many losses of staff within a business can be directly associated with organisations that retained a “force work from office approach” or lack of flexibility towards employees.