There are many reasons why employee retention is one of the
most important considerations for your organization. Among these reasons, which
include employee satisfaction and team morale, the biggest reason—or at least
the easiest to measure—is cost.
And these costs also include the knowledge and experience
that an employee gained while at the company; a loss that will turn into a several
month-long learning curve for whoever replaces them.
Other reasons that employee retention should be carefully
considered are that the organization’s performance and reputation could suffer
with a lot of turnover, and that competition to hang on to top talent is
heating up in a country with the lowest unemployment rate in decades.
So how many people are actually leaving their jobs, and why?
What are the turnover costs for companies? And what can you do to revamp your
Here’s what you need to know about why employee retention is
your best weapon in the war for talent.
A BambooHR onboarding survey, which surveyed over 1,000 U.S.
employees, showed that 31%
of workers have left a job within the first
six months, and 68% of those workers have left within three. And data from the
Bureau of Labor Statistics (BLS) shows that since January 2019, every month
million employees have left their jobs voluntary. BLS
data from 2018 showed workers had been with their current employer for an average of
The BLS also reported that workers in the baby boom
generation were found to hold an average of just under 12 jobs throughout his or her
lifetime, between ages 18 and 50. However, nearly half of the 12
jobs were held between ages 18 and 24. This means that younger workers are more
likely to shift more often, and so retention strategies should put emphasis on
what would appeal to this younger population.
do employees leave?
It’s no surprise, really, that modern workers are hard to
retain. It’s easier now than it’s ever been to research a new company or
refresh a job board each and every day. With the endless resource that is the
Internet, workers are learning more about what’s fair and what isn’t, what they
could be getting paid versus what they are making.
But, the reason for the two-weeks’ notice has to stem from
something specific and not so broad as “I wanted something better.” So what
drives employees to leave?
The BambooHR survey mentioned above also reported the top
three reasons that surveyed employees left their positions within the first six
They were no longer interested in
the work (28%)
Their jobs were not what they had
expected in the interview (26%)
They didn’t like their boss (23%)
This feedback shows that an important part of a new job is
transparency: if the work was nothing like what was described, employees aren’t
going to feel great about that. If they deal with a rude manager, that’s
another red flag. And when it’s only been a few months, they may feel less
inclined to stick it out—they are less attached or invested in the company at
this point than they would be years in.
points out, other reasons that employees leave are because they found a better,
more competitive alternative (perhaps a company that provides more benefits or
higher salaries); they had a “predetermined plan” to quit because of life
circumstances, such as going to get a degree or having a family; or they had a
frustrating experience that led them to act on impulse. An example of the
latter could be that they didn’t receive a promotion or raise when they thought
they deserved it.
addition, a survey from America’s Health Insurance Plan (AHIP) showed that 56%
said health coverage was a key factor in whether or not they stayed at their
current job. According to a SHRM survey, 92% of employees said that benefits remain
important to their job satisfaction, and that 29% of employees cited their
benefits package as one of the top reasons to look for another position within
the next year.
The cost of turnover
average cost per hire is over $4,000, according to a study from the
SHRM, and it takes 42 days on average to fill a given position. Whether or not
that number would be much higher or lower for your company, there’s no arguing
that costs are substantial. In addition to these financial setbacks, there’s no
one in the role doing the work, putting strain on your other employees.
in mind that those covering the work while a position is being filled may
expect to be compensated for the extra work, adding to the costs even more. So
needless to say, turnover is not only frustrating, reputation-hurting, and
time-consuming, it’s also expensive.
How to revamp your employee
To win the
war for talent that’s currently going on in the U.S., it’s time to revamp your
retention strategy. Based on the common reasons people leave their jobs above,
consider these methods:
1. Clearly communicate job duties
mentioned, it can be upsetting or surprising to a new hire if the duties
discussed in the interview were not accurate to the job they suddenly find
themselves in. This is why it’s not always enough for an HR rep to do the
interview and why a manager or colleague who will have similar duties should be
engaged in the candidate-seeking process.
2. Update your benefits package
workers hold health and other benefits as a top priority in their decision to
stay at their jobs, 85% of HR professionals say that they use benefits as a
strategic tool to positively impact recruitment and retention, according to an
SHRM benefits survey. For example, new trends include updates to parental
benefits, such as maternity and paternity leave and adoption leave.
another part of updating your employee benefits is about work-life balance.
Modern employees look for jobs with flexibility offerings, such as working from
home or different working hours. These considerations are especially important
when catering to the younger generations, who value workplace culture and
to the Deloitte Global Millennial Survey
2019, half of
millennials surveyed said that they would consider working in the gig economy.
This lifestyle appealed to them because of the chance to earn more money (58%),
to work their own hours (41%) or to achieve better work/life balance (37%).
3. Encourage position transfers
within the company
smart move to better retain and satisfy employees is to discuss their end goals
and their satisfaction in their current roles, and encourage them to look into
other departments if they’re not happy. Some companies are implementing this
idea into their policies and procedures, so employees can easily look at their
handbook and find out if this is an option.
4. Talk about pay equality and
equality and diversity are two hot topics in today’s workplace culture. Young
employees want to know that they’re being compensated for their hard work and
dedication, and it will be easy for them to tell if decisions like wage range
is based on discriminatory factors.
hasn’t been a focus yet for your company, start by offering trainings or
seminars where employees can learn or share. Express your commitment to these
issues so that employees know you’re thinking about it.
5. Ask for feedback
tried-and-true way to get inside the heads of your employees is to simply ask
them. Don’t try to guess how happy they are or how satisfied they are with
their work or department. Implement employee surveys that are anonymous so they
feel comfortable sharing. Hold discussions where employees can provide their
opinions, thoughts, and feelings about the company and what could be improved.
can’t hurt to introduce new perks in the office, like a Friday lunchtime game
or regular outings after work. These opportunities for interaction can help
leaders become aware of issues or successes.
is key with the current dips in the unemployment rate, which are only getting
lower. You need to create a retention plan that addresses real concerns that
your employees are having.
communicate expectations during interviews and throughout the candidate-seeking
your benefits package (including work-life balance and flexibility benefits)
regularly, based on what your workforce cares about.
position transfers within the company.
and address pay equality and diversity concerns that arise all the time in
employees in decision-making so that you can take their feedback into account.
These strategies will help you to stand out from competitors and retain quality talent. Make sure you give these considerations due care, and your overall workplace environment will improve (not to mention you’ll save on the high costs of filling positions that experience turnover regularly).
Generations Y and Z will become the largest living
generations in 2019, having already have surpassed Generation X in the workplace,
and by next year will represent half of all workers globally. With so many
working for you, understanding what makes them tick – and stick with you – is
essential to attracting and retaining the best available talent to support your
You’ve got your work cut out for you: the younger
generations don’t have a very high opinion of business. The 2019 Deloitte
Global Millennial Survey found a decreasing percentage of Gen Y – 55% in 2019
versus 61% in 2018 — believe business has a positive impact on society and
that 67% of businesses “have no ambition beyond wanting to make money.” That’s
important because Generations Y and Z often put purpose before their paycheck.
But despite their reputation as job hoppers, Generations Y
and Z are slightly less likely to leave a job after a short time than
Generation X. In 2018 about 50% of Gen Y reported working for their current
employer for at least five years, and 80% said they had stayed at their job at
least 13 months.
Jobvite noted a 20% drop in workers who say they change jobs
every one to three years (16% in 2018 versus 20% in 2017). However, despite job
satisfaction at 68%, workers say they’re still open to other opportunities.
With unemployment at record lows, these workers have more possibilities if they
choose to leave.
What’s driving them away? Gallup’s 2017 “State of the American
Workforce” report noted 91% of the thousands surveyed said they left their last
job because there wasn’t a compelling reason to stay. And Deloitte found that
almost half would quit their current job within two years if they had a choice.
It’s well past the time to rethink your recruiting, hiring,
and retention practices to keep Generations Y and Z in your workforce.
In this post, we will discuss the state of employment in
2019 as well as what the younger generations believe is important at work, what
Gen Y and Gen Z don’t value at work, and strategies to keep these employees
working for you. We’ll cover:
What’s not important to Millennials at work:
Perks such as free food and games
Certain benefits, such as 401(k), are less
Being told the company holds their values –
without backing it up with action
Maintaining the status quo
What’s important to Millennials at work:
Company values and transparency
Work-life balance, including flexible work
hours, working from home
Diverse and inclusive culture
A variety of benefits
Strategies to keep Millennials working for your
Create a company culture with their input
Develop their talent
What’s not important to Gen Y and Gen Z at work
Pointless Work Perks
The startup and tech culture of the West Coast perpetuated
the idea that free cereal bars and fancy coffee machines in the breakroom,
foosball and ping pong tables in the hallways, and artsy open concept office
spaces were all that was needed to attract and retain workers. This is not so. Gen
Y and X employees know that perks like these don’t equal benefits – or say much
about the true nature of a company’s culture.
If your recruiting materials and HR discuss a company
culture that embraces diversity and inclusion, but leadership at all levels
doesn’t support those ideals, Gen Y and X will figure that out quickly – and
they don’t appreciate these inconsistencies. In fact, about two-thirds of those
surveyed by Deloitte said business leaders only give lip service to diversity
and inclusion in the workplace.
The younger generation saves for retirement and wants you to
contribute to their 401(k). However, this cash-strapped generation saddled with
student debt also emphasizes other financial benefits available to them now and
emphasize financial wellness such as access to financial education platforms,
budgeting tools, and financial coaches.
A “this is the way we’ve always done it” philosophy
perpetuated by managers and staff resistant to change will turn off younger
employees. They want to be heard, and have their suggestions taken seriously.
They have spent their lives adapting to ever-changing technologies and expect
to use technology to enhance work productivity.
What is important to Gen Y and Gen X at work
How they spend their time, who they work for, and what they
do is often more important to Gen Y and X than earning a big paycheck. These generations
do not only expect their employers to strive for financial success, but also
want the organization to make a positive impact on the world. Working for an
organization that supports charitable causes and gives back is also important
to 75% of job seekers.
They’ll also expect you to maintain transparency by
communicating about finances and leadership. Generations Y and X want to learn
about challenges and mistakes made by their organization from leadership, not
the rumor mill.
Flexible schedules and work-from-home options are no longer
benefits offered to favorite employees. Employees from the younger generations
understand that technology makes it easy for them to work remotely and they
don’t want to commute to the office every day. They expect you to treat them as
adults and understand they will be productive from home and outside of the
traditional 9 to 5 working hours. This isn’t a new concept: the 2015
AfterCollege Career Insight Survey noted 68% of Gen Y wanted the option to work
The United States isn’t exactly known for work/life balance:
employees are expected to work long hours, take work home, and skip vacations. But
the AfterCollege survey noted that 68.78% of entry-level job seekers value
work/life balance more than any other factor after salary. A flexible work
schedule was No. 4 on the list, with 53.8% noting flexibility as an essential
Diverse and Inclusive
It won’t take employees from Gen Y and X long to learn
whether you back up your diversity and inclusion policies with real action.
They will review your leadership – C-suite and corporate board – for diversity
of race, ethnicity, age, gender identity, and more. In the era of the Me Too
Movement, these employees won’t settle for an organization that’s mostly-male
with a top-down management style.
Don’t be mistaken, a focus on values and flexible work
schedules does not mean Gen Y and X are willing to forego traditional benefits.
Gen Y and X are more cash-strapped than previous generations because of student
loan debt, and many entered the workforce during the Great Recession. In
addition to flexible work schedules, traditional and non-traditional benefits
that are important to Millennials include:
Financial wellness and literacy programs
Student loan repayment assistance
Unlimited PTO plans
Opportunities for advancement
Health and wellness benefits
What you can do to keep Gen Y and Gen X working for you
Gen Y and X want to work for companies that understand and
support their values and understand their differences and the challenges they
face. Generally speaking, generations Y and X are better educated than previous
generations – and a higher percentage of women have degrees than men. But they
also have more student debt. They are more racially and ethnically diverse.
Many delay marriages and creating a home longer, often living with their
parents. More would rather travel and experience the world than buy a home. And
they’re delaying parenthood.
There is a correlation between Gen Y and Xers who want to
stay with their current employer and their belief that the organization
supports diversity and inclusion. How they define diversity and inclusion
varies from typical demographics to ideas/ways of thinking, and tolerance,
inclusiveness, and openness in the workplace, Deloitte’s global survey noted.
Share how your leadership defines diversity and inclusion.
To understand what your workforce values under diversity and inclusion, ask
them. Then develop policies that support these values and train all levels of
employees as these definitions evolve.
These generations often value experiences over financial
gain and possession. However, they also want to be paid for the work they do
rather than work long hours in salaried positions that cause their work/life
balance to suffer.
Because they’re choosing to delay becoming parents, flexible
and work-from-home work options help retain Gen Y and Xers who want to keep
working for you but still be close to their kids.
These generations also want the flexibility to work a
schedule that supports vacation time for travel. And employers are responding:
the State of American Vacation 2018 found that employers are beginning to
encourage vacation cultures and as a result, employees are feeling more
confident about using earned time off. For three years in a row, the amount of
vacation time used increased. Still, 52% of American workers didn’t use up all
their vacation time in 2017. The younger generations are likely to decrease
Career growth opportunities rank No. 1 on the list of
factors most important to job seekers surveyed for a 2019 report by Jobvite.
The same survey noted only 17% of those who left their jobs within the previous
12 months did so for more money.
Providing Gen Y and X with clear expectations of their work
begins during recruitment and hiring. A Jobvite study found that 43% of new
hires who left within their first 90 days did so because their job duties were
different than their expectations based on job descriptions and interviews.
Training that Adapts
Nearly two-thirds of employees are concerned about the
impact of AI and robotics on the workforce. Although generations Y and X are a
tech-savvy generation, many feel unprepared for Industry 4.0. They expect their
employer to provide the training they need to be productive and successful.
Just because purpose may be more important to many younger
workers than the size of their paycheck, don’t think that means Gen Y and X aren’t
ambitious: Deloitte found that more than half strive to be high-earners.
They’ll seek out opportunities for training and advancement at work, and if
they don’t find what they want, they’ll move on. They are more comfortable than
other generations in striving for jobs for which they don’t have all the
required skills if training is offered.
The great news is that making your workplace more friendly
for Gen Y and X will benefit your employees of all ages. Offering flexible work
schedules and work-from-home options not only appeal to younger workers but
also Baby Boomer caretakers of aging parents and grandchildren. Supporting a
variety of community organizations better ensures your employers will feel you
value what’s important to them. Developing the talents and strengths of every
employee while training them to adapt to ongoing changes in technology
increases productivity and adds to your bottom line.
Employee engagement is key to your employees’ morale and productivity, which has an important impact on your bottomline. Understanding what employee engagement is and how to leverage effective employee engagement surveys is a great place to get started with creating a more engaged workforce. In this post I’ll explore why employee engagement is important, then outline a highly-effective employee engagement survey template, and finally provide step-by-step instructions on how to get started with quantifying and improving your company’s employee engagement.
What is employee engagement?
Employee engagement is the level of enthusiasm, dedication, and connection employees have to their organization and their work there. Employee engagement measures how motivated employees are to exceed performance expectations and indicates how committed employees are to staying with the organization for the long-term. Employee engagement is the direct results of company culture, management practices, and the overall work environment created.
Why is employee engagement important?
Employee engagement is important because engagement can have a big impact on your workforce’s productivity, which affects your bottomline. Several studies have correlated an engaged workforce with a multitude of business benefits. A survey of over 24,000 businesses conducted by Gallup found that companies in the top quartile of engagement average 18% higher productivity and 12% higher profitability than companies with poor engagement. An additional survey of over 600,000 employees conducted by the UK government found that companies with high employee engagement increased income by 19.2% while companies with low engagement saw revenue drop by 33% over the same period.
Research by CultureAmp also indicates that engaged employees are 20% more likely to recommend their employer on Glassdoor—a critical component to attracting top talent. Their research also showed that engaged employees are 30% less likely to be actively looking for another job.
Have higher job satisfaction
Are more committed to the company and its long-term goals
Are more likely to become high-performers
Are less likely to turnover
Want to succeed and want the organization to succeed
Are more willing to go the extra mile to help the company
Support the company’s mission and believe in the vision
Companies with high rates of employee engagement enjoy results like:
Decreased turnover rates
Better ability to attract and retain top talent
Even with all the above benefits, many companies are not doing a great job at creating an engaged workforce. Studies by Gallup found that only 33% of employees are engaged at work. They also uncovered that organizations with a poorly engaged workforce experienced 30-50% higher turnover rates than companies with engaged employees. The good news is that there are several steps you can take to improve employee engagement at your company. This process begins will implementing highly-effective engagement surveys.
How to Get Started With Employee Engagement Surveys
Engagement surveys get a bad rap for being ineffective. This is usually because they’re too long, poorly designed, ineffectively distributed, or lack high-impact questions. However, with the right approach, engagement surveys can provide increased insight into your workforce’s engagement, productivity, and job satisfaction. Effective engagement surveys transform anecdotal employee experiences into hard data, which will allow you to strategically approach, monitor, and refine your employee engagement efforts.
Before customizing your survey questions, your first step should be to identify benchmark engagement levels. Data without the context of industry-relevant benchmarks will not provide useful insights. Because employee engagement varies widely with company industry and size, take these into account when researching benchmarks.
When designing your questions, remember there are several facets that play into an employee’s overall engagement level. These include employee opinion on management, overall work environment, relationships with coworkers, opportunities for advancement, and understanding and belief in the company mission. A good employee engagement survey should include questions that determine satisfaction in each of these areas.
Don’t forget that an employee engagement survey only matters if you plan to act on the results. In advance of conducting your survey, establish buy-in from leadership and put time on the calendar to review survey results.
Here are some key things to keep in mind when designing your employee engagement survey:
Before designing your survey, pinpoint industry-relevant employee engagement benchmarks
Establish buy-in from leadership before conducting an engagement survey
Include questions that cover all facets of employee engagement
Opinion on management
Relationship with coworkers
Opportunities for advancement
Understanding company mission
12 High-Impact Employee Engagement Survey Questions (And Why They Work)
1. On a scale of 1-10, with “1” being very unlikely and “10” being very likely, how likely are you to recommend [Company Name] as great place to work?
A Net Promoter Score is a single-digit figure that summaries a customer’s satisfaction with your company. In the context of an employee engagement survey, you can reframe this question to uncover your employee workplace satisfaction, therefore creating an “internal” net promoter score. An employee’s likelihood of promoting your company as a good place to work is a strong indicator of their overall engagement level.
2. I receive recognition for a job well done.
Receiving praise and recognition is one of the strongest influencers of workplace satisfaction and employee engagement. It’s important to help employees understand how their work impacts the rest of the organization. This question can gauge employee satisfaction with the amount and quality of recognition they receive.
3. I trust my immediate supervisor/manager.
Trust is a crucial foundation for any productive manager/employee relationship. Employees and managers don’t have to be friends—but for it to be a positive relationship there must be a basic level of trust. Employees who don’t trust their manager will struggle to perform optimally and become engaged.
4. I trust the upper management/leadership team.
Similar to the previous question, an employee’s trust in upper management is critical for an engaging work environment. A high level of trust in company leadership indicates employees believe in the leadership team’s company vision and their ability to achieve it.
5. My coworkers are committed to doing quality work.
This question indicates an employee’s perception of the overall work culture. Environments where all employees are held accountable and motivated properly are the best for employee engagement. If employees perceive that their coworkers are not being appropriately held accountable, this can create a toxic work environment. The above question will gauge your employee’s perception of the work dynamic between employees.
6. My coworkers respect each other.
This is another question to help gauge the work environment. It’s important that your team is establishing mutual respect. If your workplace is filled with gossip, harassment, or other negative sentiments it can quickly create a toxic work environment. Use this question to gauge how positive the relationships between employees are.
7. In two years, I still see myself working at [Company Name].
This question can give some insight around your employee retention rate. If employees don’t envision a future with your organization, this indicates unhappiness with the workplace environment and an absence of transparent future career opportunities.
8. [Company Name] motivates me to go above and beyond what I would in a similar role elsewhere.
This question gets at your employee motivation levels. In organizations with high employee engagement, employees are motivated to go above and beyond because they believe in the mission of the organization and understand their important part in achieving this vision. If your employees do not feel motivated to go above and beyond you should identify opportunities to increase performance.
9. I have access to the tools, resources, and training I need to do my job well.
This question gets to the heart of job enablement at your organization. The point of this question is to understand if employees believe they have the resources they need to perform their job at the highest level.
10. I understand what I need to do to be successful in my role.
This question pinpoints if your employees’ job expectations are clear. If employees have a clear understanding of their success metrics, it gives their day-to-day work direction and purpose. It also instills a feeling of upward mobility which helps keep employees on board. If employees indicate their job expectations are unclear, this can indicate a poor relationship between management and employees.
11. I believe there are good career opportunities for me at [Company Name].
This question also hones in on employee perception of future opportunities. If employees perceive good future opportunities for themselves at your company they’re more like to be high-performers and much less likely to look for another job. If employees do not believe there are good opportunities for them then there could be a lack of transparency around growth opportunities or underinvestment in employee training and development.
12. Is there we could be doing better at [Company Name]?
In an employee engagement survey it’s always important to provide an open-ended question. The point of this question is to provide employees an opportunity to give candid, anonymous feedback. While this feedback won’t be quantified, it can provide some anecdotal evidence towards areas of your engagement strategy that could be improved.
How to Use This Employee Engagement Survey Template
Customize the questions with your company name. Also feel free to further customize the questions, omit ones that you don’t believe are relevant to your workforce, and add your own questions. Just remember to keep the survey relatively short (15 or less questions is ideal for maximum impact).
Determine how you will distribute your survey. The easiest way to distribute an engagement survey is digitally. Google Forms or SurveyMonkey are both great options for distributing your survey and analyzing the results.
It’s important to note that the most effective engagement surveys are completed anonymously. If the surveys are anonymous, employees are more likely to be honest and give candid feedback. No matter which platform you opt to send your survey through, make sure your survey does not require employees to entire their name or email address.
Distribute your survey via email. Including a note from the leadership team about the purpose of the survey can help drive forward your engagement vision. Make sure to follow-up with your employees several times to remind them to complete the survey.
After you’ve collected responses, analyze the results. Gather your leadership team to discuss the findings from your survey. Compare your engagement levels to industry benchmarks. Based off the results to specific questions, identify the biggest areas of opportunity for improvement. Create a plan of action as to how you’ll address these areas.
Set a timeframe for when you will distribute another engagement survey to measure changes in engagement (three to six months is ideal).
As you can see, employee engagement surveys can be effective if they’re done right and include high-impact questions. Here are some key take-aways from today’s post:
Employee engagement creates a happier, more productive workforce.
Establish buy-in from your leadership team about the importance of employee engagement.
Always compare your engagement data against industry benchmarks.
Use short, high-impact surveys (and make sure they’re anonymous to receive honest feedback).
Use the results of engagement surveys to discover areas of opportunity and create an action plan for increasing employee engagement.
Do you already use an employee engagement survey? Will you start regularly distributing and analyzing engagement surveys? How important do you think employee engagement is in the modern workplace? I’d like to hear your thoughts—drop them in the comments box below.
It’s only February and “employee retention” and “employee engagement” are already emerging as top HR buzzwords of 2018. In this post I’ll explore ten data-backed reasons why employee retention must be at the top of your priority list this year.
1. The Real Cost of Employee Turnover
A study by the American Center for Progress indicates it can cost up to 20% annual salary to replace a mid-level employee. That means replacing a manager making $40,000 would cost your business $8,000! And these figures increase substantially for high-level positions. CAP estimates the cost to replace an executive level employee to be 213% of annual salary. This translates to $213,000 in expenses to replace an executive making $100,000.
Proactive investments in employee retention can save your organization the significant financial burden that comes along with turnover.
2. Time Value of Employees
It’s important to think about your employees as appreciating assets; the longer they’re part of your team, the more value they provide. As employees become increasingly familiar with the systems, products, processes, and teammates at your organization, they’ll drive more value. The figure below demonstrates this phenomenon.
Figure 1: Economic Value of an Employee to the Organization over Time (C) Bersin by Deloitte
If you have to replace a top performer, it could take their replacement years to scale up to the same level of productivity. When employees turnover, you’re losing the value from all the time, money, and other resources you’ve invested in them.
3. It’s a Job-Seeker’s Market
For companies with high turnover, replacing employees has become increasingly difficult due to jon market conditions. Extremely low unemployment rates (4.1% as January 2018) has a created a “job seeker’s market”. In a job seeker’s market, attracting and hiring talent becomes more difficult because candidates hold most of the power throughout the search and negotiation processes. In this job market, employee retention should be a top priority as replacing turned over employees will be incredibly costly and time-consuming.
4. Increasing Turnover Rates
The Burea of Labor Statistics shows increasing quit rates over the past four years. As this trend continues, employers need to be more vigilant of turnover. One cause for increased turnover is the larger presence of Gen Y and Gen Z in the workforce. On average, 60% of Millennials are open to a new job opportunity and 21% of Millennials have changed jobs in the past year. In today’s workplace, employee retention efforts are a critical component to tackling increasing turnover rates.
5. Tough Competition
Small-to-mid-sized businesses are often competing against big-name players in the space. Sometimes it seems like these larger players have infinite resources: more resources, more money, a bigger sales/marketing budget, and more. But you just might have an underestimated your biggest competitive advantage: your team! For small businesses, a stellar team can be the differentiator between you and major competitors. Investing in employee retention will mean you can better attract, develop, and retain your top performers.
6. Employee Morale
Frequent turnover can have a negative impact on your entire team’s morale. When team members see frequent turnover they can lose faith in the organization. A more intentional approach to employee retention can help avoid negative morale.
7. Protect Your Greatest Assets
For any business, your two more valuable assets are your people and your cash. Paying attention to employee retention can help you protect both! A strategic approach to retention can help you protect your cash by avoiding the financial consequences of employee turnover (recruiting costs, employee training, lost productivity, etc.). For small businesses, anticipating and managing cash flows can be a challenge. Strategic employee retention helps prevent unexpected changes to cash flows (for example, a top sales performer quitting). Additionally, a high-impact employee retention program helps you invest in and retain the top performers that help your business thrive.
8. Good People Practices Directly Correlate to Financial Gains
High-impact employee retention practices have been shown to directly correlate with increased revenues. In a case study conducted by Maia Josebachvili, she estimates the purposeful onboarding and retention of a top sales performer would bring in an additional $1,300,000 in revenues over a three-year period.
Figure 2: via Maia Josebachvili.
9. Customer Success
When you’re unable to retain employees, you’ll constantly be onboarding and training new employees. And when several inexperienced employees are working, mistakes are more likely. These mistakes can ultimately harm relationships with customers. Beyond this, when a customer’s point-of-contact changes, they take notice and ask why.
10. Your Employer Brand
A study by Jobvite showed that 59% of job seekers research companies on social media and career sites prior to applying. If your company neglects employee retention, you’re more likely to accumulate less favorable reviews on Glassdoor, Indeed, and other career sites. Potential job candidates may be skeptical of a company with high turnover. These reviews can have a big impact on your ability to attract talent in the future.
Employee Retention Key Takeaways
Here are some key take-aways from this post:
Neglecting employee retention can have a big impact on your bottomline.
Replacing turned over employees is difficult, time-consuming, and expensive.
Your workforce is one of your company’s greatest assets, and it should be invested in accordingly.
A great retention strategy can pay off with big financial gains.
It costs nearly 20% of an employee’s annual salary to replace a current employee.
Roughly 63% of employees are actively looking for a new job.
Engaged employees are 87% less likely to leave their organization.
The majority of turnover (52%) occurs in the first year of employment.
One in four employees would leave their job for a 10% raise.
Only 17% of organizations are aware of the costs of employee turnover.
About 65% of employees believe they can easily find a better position that pays more.
5 Strategies to Retain Your Top Talent:
Know who to retain. How do you identify top performers at your organization? Pinpointing rising stars is crucial to your overall retention strategy. Look for employees with the following traits: dedication to high-quality work, desire for growth, self-starter, decision-maker, critical thinker, and great communication skills.
Provide realistic job expectations. Be explicit and clear on the responsibilities entailed in a position from the beginning. Employees should have a clear understanding of the scope of their position and have a general idea of what their day-to-day will entail. Unrealistic/untrue expectations lead to employee disappointment, frustration, dissatisfaction, and ultimately attrition.
Get compensation right. Compensation is a critical component of your overall retention strategy. If you can afford to compensate over-market, you should. You should also factor in the value of your total compensation package, which includes all the benefits you offer. It’s important to make sure the value of your total compensation package is clearly explained to new employees. Your current employees should also be continuously made aware of the benefits offered to them.
Provide clear career-pathways. Annual performance reviews can be stifling for goal-oriented, fast-moving top performers. Instead, design an individualized career-path with clear goals and quarterly performance milestones for each employee.
Connect employees beyond their manager. In a study completed by The Herman Group, 75% of employees leaving a position claimed they left due to a bad manager. This figure demonstrates the importance of helping employees connect with the organization beyond their direct manager. Some effective ways to do this include providing each employee with a mentor, implementing 360 degree performance reviews, or leveraging peer reviews.
Subscribe To Our Blog
Subscribe to have our latest blog content sent straight to your inbox.
FREE GIFT: receive our most popular eBook on Company Culture when you subscribe.