There’s no getting away from it, the cost to a business of staff turnover is significant. These costs arise through the additional recruitment and training expenses and the associated loss of productivity. It is not uncommon for these costs to be in excess of 25% of an employee’s annual salary.
There are also a host of less tangible costs associated with staff leaving the business:
Breakdown in customer relationships – Customers do business with people they like and trust. Relationships are developed between your staff and your customers which encourages repeat business. When an employee leaves, these relationships are severed and it can often lead to the loss of customers.
Spiralling turnover – When a member of staff leaves, the negative effects can be felt throughout the business. Often colleagues are required to pick up the slack and negativity can sweep through the remaining employees, leading to even more departures.
Loss of company knowledge – When a member of staff leaves they often take with them valuable knowledge about the company, your customers and current projects. This knowledge is more often than not taken with them to a competitor.
With the economy improving, job opportunities outside of your organisation are beginning to look more attractive for the first time in years. Below we examine 5 tactics that will help you retain valuable members of staff and keep the associated costs of attrition to a minimum.
1) Hire right first time round – The best way to recruit and retain quality staff is to set up a multi-layered, carefully managed selection process. A three part application process should include assessment, screening and interviews. This will help identify the candidates that are serious about building a career within your organisation.
2) Train managers around employee retention – Good management is crucial to the retention of your staff. There is no truer cliché than “people don’t leave companies, they leave managers”. The training should, at the very least, develop skills around the following:
3) Measure employee retention – You can’t improve employee retention if you don’t measure it. If you track retention accurately you will see patterns emerging that will help identify which of your managers are doing a good job and, more importantly, which require additional training and development.
4) Create a path for development – It stands to reason that the more employees can develop internally, the less likely they will look externally to develop their careers. You should have a robust development plan in place for every member of staff. Each employee should have a clear path to increased pay, recognition and responsibility.
5) Provide flexibility – Inflexible working conditions can very quickly drive good employees into the arms of competitors with a more flexible approach. Being flexible around non-work responsibilities, working hours and working locations is a really cost effective way to help retain your best employees.
As well as helping to make significant cost savings in recruitment and training, the cumulative effect of an employee retention strategy can help to increase company morale and give employees a sense of pride in what they do. In turn, this will help improve overall business performance and increase employee engagement.