Employee Retention: The Cost of the Rotating Door
Employee turnover is one of those expected and unavoidable facets of running a business. Although it’s experienced by most companies with some regularity, if you find you’re consistently “on the hunt” for new employees, you need to take a serious look at what’s causing the rotating door at your workplace.
What makes some employees stay and other employees leave a company? As a manager or owner ask yourself:
Have I provided each of my employees with a clear description of duties/expectations for their position?
Does the salary square up with the responsibilities and level of experience the employee brings to the job?
Is there a well-defined process for employees to communicate with fellow employees and management?
Does the company value and ENCOURAGE employee input and routinely ask for suggestions/ideas from employees to both improve the work environment and/or solve problems as they arise?
Is there a potential for growth/advancement within the company and is the company willing to assist with advanced education to allow highly motivated employees the opportunity to build their skills/knowledge for advanced level positions with the company?
Does the company strive to create a team environment and work to build morale?
Are employees valued and included in the success of the company by way of salary increases/bonuses/time off etc?
Does the company play a supportive role in the community by way of fundraisers/events that support the needs of the local area?
Does the company offer summer programs for local college students or internships that act as a pipeline for potential future employees?
Does the company celebrate the achievements of employees through newsletters/social media posts/company announcements etc?
Was there an adequate on-boarding/training period for the new employee to ensure success and productivity?
Was the position accurately described during the interview process and was a clear picture painted from the start?
Statistics clearly show, it’s more cost effective to train and retain current employees than to begin anew with fresh hires on a routine basis. The Center for American Progress estimates that the loss of a seasoned employee is equivalent to 200% their annual salary. Consider this, for each employee that needs to be replaced, the tasks shown to the right need to be completed.
Every employee who walks out the door takes their experience and knowledge with them which results in lost productivity, lost engagement with clients, and potential errors made by temporary or new employees.
A LinkedIn survey of 13,000 millennials was conducted to address exactly WHAT is the key to attracting and retaining a beginning level employee. Surprisingly, salary was not the top response but instead, the younger workforce is looking at :
One not surprising finding is that millennials respond well to companies that offer assistance with the repayment of their student loans even though only 4% of companies nationwide offer such a benefit.
Employee turnover is part of the business arena that will always be an issue. How big of an issue, it is depends on how well you select the best candidate(s) for your positions and how well you integrate them and value them in the company hierarchy. The answer for the BEST employees might be in front of you already, not behind the next resume. Reward and retain...it’s a win-win for everyone.
Check out how the precast industry is dealing with employee retention by taking a look at our blog post The Struggle to Attract Skilled Workers to the Construction Industry.