How Important Is Employee Retention?
Hiring and retaining employees is a major organizational issue. Life Work Solutions reported that 70% of organizations report having difficulties in replacing staff. 50% experience regular problems with employee retention.
According to one strategic planning consultant, 88% of employees leave their jobs for reasons other than pay, but 70% of managers think employees leave because of dissatisfaction with pay. Astron Solutions’ own exit interview normative database reveals similar findings. So what are those mysterious turnover reasons? A feeling of mismatch between the job and the person, minimal feedback from management, few growth opportunities, and feelings of being undervalued and underappreciated.
Employee turnover is expensive. It costs money to recruit and train an individual. Add to that the expense incurred when losing an individual – think productivity loss, severance, and lost organizational opportunities. A conservative turnover cost estimate is 50% of the departing employee’s wages and benefits. Multiply that figure over the total number of exits at your organization. Can you strategically afford to have that sometimes invisible cost hitting your organization’s bottom line?
Recruiting and Selecting Employees
An article in Insurance Journal suggests using a variety of methods to attract job candidates, with an increased emphasis on the positive imagery of the organization in general to the public, also known as branding. It is critical that the positive imagery or branding be true within the organizational structure. By doing so, employees within the organization may suggest that others join the ranks. Many organizations with minimal turnover rates gain new employees through referrals.
In addition, employee attraction and retention isn’t all about cash compensation. By advertising the organization’s total rewards package, employees can identify the elements important to their individual value systems. Total rewards opportunities such as open communication within the organizational structure, opportunities for advancement both professionally and educationally, flexible starting times, and even part-time position openings have become tools effective in creating many loyal employees.
Keeping the Best
According to one recent survey from SHRM and CareerJournal.com, employees who exit organizations leave because of the following:
• They seek better compensation and benefits (53%)
• They are dissatisfied with potential advancement (35%)
• They were ready for something new (32%)
As with the suggestions for attracting employees to an organization, these same total rewards elements can help keep these employees within the organization. Other suggestions include the following:
• Provide performance feedback on and recognition for a job well done.
• Offer cross training opportunities, as well as personal / professional growth training.
• Utilize open communication in regards to employee and organizational goals, roles, and responsibilities.
• Celebrate success through the organization’s use of teamwork.
• Staff adequately, so workers do not feel overworked. This may include adding part-time employees or even temporary employees in seasons of high productivity.
Every organization faces the challenge of finding a balanced solution to the challenge of talent retention. Why not begin seeking responses from employees now with respect to organizational enhancements to keep them happy and satisfied? Start communicating today! The Finders Keepers™Suitemodule, part of Astron’s exclusive Flare™ Talent Management system, helps with facilitating talent retention. First Impressions™ Surveys, opinion surveys, and 360 degree reviews are three of the many tools available to help you better understand your employees and reduce turnover costs.
Irrespective of your approach to gathering a better understanding of your employees’ wants and needs, the most critical aspect is taking action. Without asking the questions, you’ll always be left wondering why your organization is having trouble attracting and retaining the “Keepers.”