Retaining Employees- Is This Crucial?
Although reports can’t agree on one price, most estimates put the cost of losing an employee at two times that of the employee’s annual salary. In addition, that cost can rise quickly if we are talking about replacing executives.
Why It Costs So Much to Lose An Employee
- The old employee takes his company knowledge with him, which is hard to put a price on but is significant
- You’ve got to advertise, interview, screen, and hire, all of which take serious time
- There are on-boarding costs such as training and staff time spent with the new employee instead of working themselves
- Productivity is lost while companies look to replace an employee, and as the new employee is getting up to speed
- Errors increase due to the new employee being unfamiliar with the company and its policies and operating standards
The true costs can never be fully known as most companies don’t track the actual price of replacing employees. There are certainly additional costs not accounted for that add to these losses as well.
How to Improve Employee Retention
- Adopt a good benefits program that attracts high-quality (and happy) employees
- Offer career development and leadership training
- Put a survey in place to assess employee morale and consider a suggestion box system
- Consider offering high-value employees more benefits
- Always give exit interviews to determine WHY the employee left so you can change for incoming staff
Why Recruitment is Key:
Employee retention efforts often start during the recruitment process. Hard data evidence shows that employees are more likely to stay with a company that gave a realistic view of its corporate culture, advancement opportunities, and role expectations. Providing good benefits packages also attract top talent and keep them around. Being able to rely on your team is important to company culture. The longer that employees remain at a company, the more it starts to feel like home. Allowing your employees to be completely comfortable with their coworkers is key to improving trust, communication, and productivity.