5 Reasons To Improve Employee Retention Companies with dissatisfied employees may face a swift exodus of their top talent before they know it. Truth is, whether dissatisfied or not, employees can make an exit from your organization at any time, leading your company to run into an alarming situation. Even in today's precarious business scenario and with a rate of 7.8% unemployment, over 2,000,000 US citizens quit their jobs every month. Bureau ofLabor StatisticsUnited States Department of Labor has termed this category as 'Quits'. Let's look at the top 5 reasons to why employee retention matters.
1) Turnover cost isn't perception. It's reality. Scratch the surface a bit, and you'll realize employee turnover is way too costly. In fact, Businesses normally incur huge costs in replacing employees. Starting from looking out for the right employee, interviewing, validating the credentials and references, hiring, training, apart from the lost productivity while the hiring and training goes on. The estimated cost for mid-level employees can be
150% (of their annual salary), and for specialized employees or the top brass it can go up to 400%. 2) Nothing's more valuable than a Well-informed employee During mid 1990's when experienced mechanics started exiting Delta Air Lines Inc., it started hiring less experienced new employees on reduced compensations. But they took much longer to diagnose and fix the planes. As a result- flight delays and cancellations increased, customers were dissatisfied, and Delta's costper-seat mile soared. Knowledge loss impacts an organization's continuity of work. Knowledge is powered by experience, sound judgment and pure know-how of any service or product. Your old employees are trained in thinking from your organization's perspective. You can train your new employees, but cannot hand over your earlier employee's experience to them. An old-hand goes a long way in generating productivity and in overcoming hurdles. 3) Morale (and more) takes a beating There's no denying that morale of your existing employees will be lowered in the loss of other employees. What's more worrisome is it spreads
negativity in the work environment, stifling yourexisting employees' capabilities, driving them towards low performance. They will be under the pressure of losing their job any minute. It may even influence your best employees to leave in the face of growing insecurity. A high employee turnover can even strain the relations between managers, working staff, and upper management. It can also affect interoperability between the departments. Besides, you're prone to receiving flak from both inside and outside of your firm, which may spread distrust amongst your investors, shareholders and industry analysts. 4) Interpersonal relations with new employees matter New employees come in with separate value systems, mannerisms and social skills. Sound interpersonal relations between them and old staffers will be created in time. Building of strong trust, understanding and dependability would be needed before they can get involved in teamwork and start functioning. How new
employees eventually perform will hugely depend how they fit into your organization. 5) You may risk alienating your consumers/clients If your last employee directly dealt with your clients who give you regular business, chances are she/he must've had a personal rapport with them. Replacing such an employee can adversely affect the comfort of your client and might even make them feel alienated. And in case an immediate replacement doesn't happen, leaving the position vacant for some days may lead them to turn to another service provider or manufacturer altogether. Also, if the employee handled outside vendors or was in sales, their resources or contacts may never be accessible to you again. Wrapping up During January 2013, Fast Company reported, men and women would hold 11.4 and 10.7 jobs, respectively in their entire lifespan. And the median of the number of years an individual in the United States will stay in one job will be 4.4 years. A sharp contrast from the times of the 'company man' of 1950s & 70s. Employee retention is clearly the need of the hour. As going by the current trend, productivity across industries
is bound to take a hit; the ripples of which might be felt in the economy too. Andrew Carnegie, once said, “Take away my factories, my plants; take away my railroads, my ships, my transportation, take away my money; strip me of all of these but leave me my key people, and in 2 or 3 years, I will have them all again.� In other words, it's time to start paying heed!