Why organizations need to improve employee retention
Employee retention can be understood as an organization’s capacity to retain its staff. With the proper practices and strategies, you can keep top talent from leaving your company, regardless of turnover factors.
In most industries, the volume of employees who leave their jobs is expressed as a percentage. According to the U.S. Bureau of Labor Statistics, turnover rates in the public sector can range from 20% to 60% in professional services.
Voluntary employee turnover can be curtailed by an effective employee retention strategy. Reducing employee turnover also reduces costs and hindrances the company’s ability to grow.
The costs of replacing an employee range from 16% to 213% of their salary. Companies in the United States spend $1 trillion a year on turnover. Yes, you read that correctly. To keep their best workers, companies should put employee retention at the top of their priorities list.
When an employee leaves a company, the following consequences must be considered:
- To replace the employee, it will cost money and time (including recruitment and onboarding of new talent)
- Employees who are left behind have lower morale.
- Decreased productivity all through the hiring and onboarding phase
- Lost experience and business knowledge
However, when employees stay with a company for a long time, there are great benefits, such as:
- Enhanced well-being of workers
- Employees who are happy and content
- Reduced absenteeism
- Loyalty to the company increases
- A higher standard of customer care
- Increased profit margins
How to Improve Employee Retention
Hire the best talents possible.
We found a strong link between increased levels of employee engagement and high levels of employee retention in our study.
- Disengaged workers were 3 times more likely to abandon their employer within the first 90 days of the survey than highly engaged workers.
- Disengaged staff members were 2.6 times more likely to leave the company in the 180 days following the survey.
- Disengaged workers were 2.1 times more likely to leave their company one year after the survey than their strongly engaged counterparts.
In terms of both time and money, that’s an enormous investment for just a few months of service. That’s why it’s so critical for companies to make early investments in the right hires. Communicate your vision clearly and pay attention to potential inconsistencies in expertise and culture so as to avoid mismatches in talents and roles.
Make the onboarding process as smooth as possible.
After you’ve found the perfect candidates, you can begin onboarding and training them. When it comes to onboarding, it’s not just about signing a contract, going on a tour of the company, and organizing the perfect employee desk.
In order to ensure high employee retention, your onboarding approach should be strategic and “last at least one year,” according to SHRM.
Several objectives should be the focus of the onboarding procedure:
- Reinforce the positive impression you made in the first place
- Clarify your expectations for them in terms of their work and future prospects with the business
- Describe the first week’s activities and what to expect.
- Make it easier for new hires to get to know their coworkers and colleagues.
- New hires should be given structured opportunities to provide feedback on their work, company operations, and culture.
- Consider the long-term future and growth of the employee at the company.
Develop a feedback and reward system within your organization.
Employees want to know that their efforts are recognized and appreciated. Creating an environment where employees are encouraged to provide feedback and be recognized for their contributions can go a long way toward making them feel valued and less inclined to look for validation elsewhere.
- Recognition and feedback can be included in your company culture in a variety of ways.
- Surveys are a great way to keep an eye on the pulse of your employees.
- Meet with each employee on a frequent basis one-on-one to review. performance, provide comments and discuss career advancement.
- Set up an employee reward system. Peer-to-peer acknowledgment, public and private commendation from management and corporate awards or shoutouts are all ways to cultivate a culture of recognition at your workplace.
Develop your staff.
It’s important for employees to realize that they have a long-term future at your organization. If they can’t find it, they’ll go elsewhere to look for it.
- In order to engage and retain top talents, it is essential to invest in their professional growth year after year.
- As much as possible, look to hire and promote from within your own organization.
- Give employees the chance to get coaching and mentoring.
- Routine performance discussions should include conversations about long-term staff goals and development.
- Try to learn about the expectations and aspirations of your employees so that you can better assist them. In five years, where do they want to be? What are they hoping to learn or gain?? Let them know about the training, mentorship, and educational assistance that is out there for them.
Act based on data from exit polls.
Employee turnover, even though minimal, is actually inevitable. However, even if you have a modest turnover rate, you can still get valuable insights from departing employees.
By conducting exit surveys, you can get major insights from your departing employees on why they’re leaving and what recommendations they may have for enhancing the company. You never know what you’ll discover.
Tools that Help HR to Drive Retention
According to PWC’s HR tech report, the usage of technology by HR professionals is on the rise. Payroll, benefits administration, and rewards/compensations all have high rates of implementation. Around 40% of survey participants said they are considering or planning to implement more technologies, with the greatest levels of interest in learning management, HR help desk, talent management, and talent acquisition technologies.
Technology tools involving the Internet of Things, robotic process automation, blockchain, AI, and virtual reality can revolutionize human resources and substantially cut the time HR professionals devote to routine work, while also giving the data they need to reach more-informed decisions or adjustments. It’s important that organizations use these technology tools in a smart way.
The use of technology to monitor productivity and performance among remote workers is noteworthy. Approximately 95% of those polled by PwC and Oracle have either implemented new ways for tracking and reporting productivity and performance metrics of remote workers or have the plan to do so. Talent development, remote work, and strategic use of technology are all important areas to focus on.
Oracle’s Human Capital Management (HCM)
Using Oracle’s Human Capital Management suite, employees may gain new skills, analyze relevant recommendations for learning, take training on their own schedule, and choose the next steps in their career development. HR professionals looking to fill certain tasks can use technology to detect skills gaps in present employees, identify talents that need to be improved, and provide learning opportunities for individuals interested in a specific job type.
Most of Hyatt’s housekeeping staff, on average, has been with the company for more than a decade. More than 14,000 of Hyatt’s approximately 75,000 US employees have been with the company for over 10 years.
Hyatt trains its employees for the long term as an example of an effective employee retention strategy. The organization is clearly taking steps to keep its employees happy and productive.
Recruiting from within is a priority at Hyatt, which uses its existing workforce to identify potential company leaders. The company’s training program is indeed world-class.
Workers are encouraged to think beyond the box when it comes to solving difficulties and completing daily tasks. Their Employee Referral Program is the company’s primary source of new personnel since it places such a high value on employee recommendations.
85 percent of Zappos employees remain with the company for more than a year. So, how do they manage to achieve this?
Companies with strong staff retention rates tend to be transparent in their choice to showcase the company’s basic principles in public.
Amazon-owned Zappos is also one of the few businesses that incorporate a wide range of positive values into its retention strategies. Every single employee has a trajectory that is defined by the company’s own brand and business partnerships.
While trust has become an important part of the corporate culture, Zappos has been hiring employees that fit in well with the team. In addition to this, they promote individualism and creative expression. They’ve been rewarding their staff for their hard work while also allowing them to take control of their own schedules in order to accelerate the creative process.
It’s well-known that retaining the best employees is essential to a company’s success. It costs money and takes time to find and hire new personnel. In addition, employee turnover has a detrimental impact on staff morale and productivity.
Business leaders have been scrambling to reduce turnover due to a lack of workers in the previous year. The necessity to implement effective employee retention techniques is becoming more widespread. Now that you know the ways to improve employee retention, what are you waiting for?