If someone was to open up a suitcase full of money and let you know that you have the option of keeping it, or giving it away, would you think about it? What if someone talked to you about your top performers and told you that they could get up and leave any minute?
Employee retention is the act of keeping employees. Webster’s Dictionary defines retaining as keeping in one’s pay or service. Unless it needs to lay off employees, the organization wants to keep its employees in its pay and service. There are many reasons that organizations want to retain employees, and there are actions the organization can take to promote employee retention.
Hiring and training the right person for the job can take time and money. It’s important to retain your employees and keep turnover rates low to prevent this expense from occurring on a frequent basis. However, employee retention strategies can be difficult to implement, so have a plan that incorporates various aspects of employment to keep your staff happy and focused on making your company a success
The Society for Human Resource Management defines employee retention as the rate at which organizations maintain employees in positions. Employee retention is the opposite of turnover, which can have extreme costs, both financial and non-monetary, for the organization. Businesses that conduct effective employee retention strategies are better able to protect organizational resources than those that experience high turnover rates.
Retaining employees minimizes costs associated with recruitment, selection, training and benefits. Every time an employee leaves your organization, the cost to replace that employee as well as the staff time necessary to fill another position, quickly adds up and ultimately affects your company’s bottom line. Employee retention tools can be effective in improving loyalty, reducing turnover and recreating a stable workforce.
Employee turnover can cost a company many thousands of dollars. On average, each employee who leaves the company costs the organization approximately 38 percent of his annual wage to replace him, according to Penny Morey on the “Entrepreneur” website. This number doesn’t take into account the poor office morale, lost expertise and other consequences of poor employee retention. Look for ways to increase your retention rate, and you’ll not only have happier employees, but your company will have a better bottom line as well.
Managers who want to decrease their employee turnover rate would do well to recognize the importance of teamwork and cooperation in levels of employee satisfaction. This is the area that cannot be preached but rather has to be practiced. A team as strong as its individual team members, and team member can only perform well if they have the tools necessary to succeed, Hard skills and “harder skills” such as Emotional Intelligence. While high pay and good benefits are important to employees, they are not sufficient in and of themselves to keep employees over the long term.
Employee retention is a continuing issue for employers, even at the tail end of a recession. Many employers in the late 2000s believed that high unemployment figures allowed them to ignore things such as employee morale and compensation, since negative job markets force unhappy employees to stay in their current job. However, according to an article on the Main Street website, up to 84 percent of Americans “intend to seek a new position” in 2011. Investing in training is one of the ways an employer can help retain employees, while reaping other benefits.
