Why is Employee Retention So Important?

A key challenge in the modern world of work is effective employee retention. It should be viewed as a priority topic across all business functions, yet it can often be treated as just another statistic on a report when the subject of staff turnover is mentioned. All organizations should strive for high levels of employee retention as it can be a prime indicator of the overall health of a company from its employees’ perspective. There are numerous benefits to this, and some of the key points will be discussed below, along with some ideas to increase employee retention. 

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Keep Recruitment Costs Down

According to Glassdoor.com, the average cost to hire an employee is around $4,000. This is a significant sum for any business, especially when this figure is multiplied when staff turnover is high and several new starters are needed during a business year. Along with the recruitment costs, there must also be the consideration of the time and money that goes into training inexperienced staff to ensure that they work effectively and embrace the organization’s values and goals. 

Build Long-Lasting Teams

It can take many years for a team to reach its full potential in terms of collaborating, communicating effectively, and working for each other in times of high workloads. If a company has a high turnover of staff, the team dynamics will shift more rapidly. Time will need to be spent building trust and adapting to new employees along with teaching the intricacies of some of the team-specific working practices and systems. It, therefore, makes perfect sense to strive to keep staff as long as possible. A team also can only develop and mature over time, as has been documented by Tuckman’s four stages of team development model. Losing key collaborators because of high staff turnover levels can effectively set back the growth of a team until it adapts to the new individual members. Imagine that time is lost as a period where a team is not functioning at its optimum level and producing the best work for the organization. You then begin to understand the impact and importance of a highly functioning team that has worked together for a significant amount of time.

Retain Specialized Knowledge

An employee who leaves a company after years of loyal service takes with them an immense amount of specialist knowledge that is completely relevant to the organization. This may cause a reduction in the team knowledge base and may lead to uncertainty in how to perform specific tasks or less effective ways of working. Long-serving employees have built up years of knowledge that is of immense value, and it takes a similar amount of time for new starters to gain this expertise.

What can be Done to Maximize Employee Retention?

Organizations such as inpulse.com recognize the value of maximizing employee retention and offer employee survey platforms to analyze feedback from staff which allows businesses to gain valuable insights into how to retain them long-term. Open channels of communication are vital in minimizing staff turnover so that employees’ voices can be heard and improvements can be made to the working environment. Competitive salaries, total benefits packages, and clearly demonstratable routes to career progression internally are also key factors in ensuring that employees see an inspiring future with their current employers and wish to stay for significant periods. It is imperative for employers to actively listen to their employees, both for the good and the bad perceptions of the working environment. When employees are consulted and can see that change happens when concerns or improvements are raised, the culture of the organization is shown to be receptive to their needs.