The cost of employee turnover varies from business to business, role to role, but in general it is estimated that it costs about twice the salary of an employee to find and train a replacement for that role. If your business is experiencing high turnover, chances are you are experiencing high losses as well. The costs of reviewing applications, processing candidates, conducting interviews, training and purchasing equipment for new hires aren’t only monetary—time and lost productivity are costly to your business as well.
Given the high cost of losing an employee, retention should be a top priority for every organization. If you do not already have a retention strategy, now is the time to make one. The first step in curbing turnover is figuring out why employees are leaving.
Employees leave organizations for a variety of reasons, depending on their unique circumstances. However, there are some common reasons that may help determine the best retention strategy for your organization. Below are some of the most common reasons employees leave:
- Stagnation—Employees are often looking for career and personal growth. If they have no upward mobility at your company, they may look for it elsewhere.
- Pay—Compensation needs to be competitive to attract the best talent. Likewise, good pay is needed to retain top talent.
- Workplace culture—As can be expected, co-workers matter to employees. If they feel ostracized or marginalized by co-workers (or management), they will want to leave that environment.
- Better opportunities—Like with stagnation, employees leave when they believe they have better prospects elsewhere. This could be due to a higher-paying position or simply a job more aligned with their interests.
Employee Retention Interviews
Retention strategies are not universal. It is possible that techniques and strategies that work for some organizations will not work for yours. This means you need to analyze why your employees are leaving and strategize how to combat those reasons.
Exit interviews are a great way to find out why employees are leaving. During exit interviews, managers ask questions to employees who are on their way out of the company. Questions should be related to the employees’ time with the company, such as what they enjoyed, what they disliked and what prompted their resignation. Exit interviews will only be useful with employees who resign or leave voluntarily, not those who have been terminated.
Creating a retention strategy does not need to be solely reactive. A more proactive strategy could be to conduct interviews with employees who have stayed with the business for a long period of time, so you can find out exactly why they have remained with the company and what it would take for them to leave.
Depending on the responses from the interviews, you can begin crafting a retention strategy. For instance, if a main catalyst for employee turnover is a lack of upward mobility, think about how to change that. It could mean creating new roles or, if roles already exist, making a clear guide for career pathing at the organization.
Employee Satisfaction Surveys
Consider creating a survey to gauge employee satisfaction with the company. Include questions about what people like and what they do not like about their job. SurveyMonkey suggests that employers include questions that gauge how employees really feel about the company and their role in it, such as:
- How meaningful is your work?
- How challenging is your work?
- In a typical week, how often do you feel stressed at work?
- How well are you paid for the work you do?
- How much do your opinions about work matter to your coworkers?
- How often do the tasks assigned to you by your supervisor help you grow professionally?
- How many opportunities do you have to get promoted where you work?
- How likely are you to look for another job outside the company?
Tips for Employee Retention
There is no hard and fast rule for successful employee retention. Creating a retention strategy for your organization requires you to analyze both your company and its industry. But as a starting point, try these tips from Forbes:
- Hire Selectively – Before you can begin to retain employees, you have to make sure that you have the right employees to begin with.
- Offer a Competitive Benefits Package and Salary – If you want to keep top-notch talent, then you’re going to have to pay them well.
- Provide a Comfortable Work Environment and Culture – Employees want to feel safe and comfortable at work. You also need to have a culture that matches your industry, engages your employees, and motivates them.
- Offer Training – New technology, new selling techniques, changes in employment laws, and the huge impact of the internet are all compelling reasons to keep permanent employees in the loop.
- Listen – You can learn a lot when listening to employees. You can always spare a few minutes to find out what’s going on with your employees in both their professional and personal lives.
- Conduct Quarterly Reviews – These one-on-one meetings allow you to set goals and define how you want these goals to be achieved.
- Recognize Accomplishments – However you decide to reward your employees, praising employees for completing performance goals is one of the most effective ways to make them feel appreciated, which will make them want to stay with you for the long haul.