The Benefits of Employee Retention
51% of RES Forum incentive and mobility professionals listed employee retention as a challenge. What is employee retention, then?
Employee turnover rates have hit all-time highs due to the fact that employees are continuously comparing their positions to new opportunities within a globalized social network.
Due to the enormous expenses associated with high staff turnover rates, businesses are exploring efficient retention strategies.
Managing for employee retention is taking active steps to retain employee motivation and attention so that employees continue to work for the business and are fully productive for its benefit. This result in employees making the decision to remain employed. A comprehensive employee retention programme may be quite useful in a number of ways, including attracting and retaining important individuals, reducing employee turnover and the costs associated with it, and saving money. One way or another, each of these aspects has a role in the level of productivity and overall business performance at a company. Keeping a good employee on board is more cost-effective than having to find another person of the same calibre, train them, and orient them to the company’s culture.
What is employee retention?
Retention of employees is a company’s capacity to keep its current workforce. It is directly related to employee experience, since a positive employee experience correlates with a higher Intention to Stay. Employee retention tactics are the activities firms do to maintain employees’ satisfaction, engagement, and productivity.
Why does does it matter?
If your employees are the source of your innovation, it is imperative that you retain them. Moreover, employee retention is essential for the bottom line. Turnover is expensive for businesses and can directly affect corporate performance.
Losing a valued member of the team is only a small portion of the problem. In the time leading up to a leave, employee engagement and work satisfaction may decrease. Unhappy employees are less productive, less engaged, and less likely to experience a feeling of belonging at work.
In contrast, research indicates that employee engagement as part of a pleasant employee experience makes them more likely to work harder and resolve issues, grow and develop more quickly, get along with others better, and remain with a firm for longer.
Why Employee retention is beneficial for your business?
As companies compete for the best talent, employee retention is essential. While some experts advise that a 90 percent employee retention rate is a fair target, the reality is that it differs across industries and firms. However, the capacity to retain staff is advantageous for a variety of reasons. Here are few of the greatest advantages:
- Reduction in cost
Employers annually invest several millions of dollars in hiring and training new employees. Those costs are irrecoverable if a worker resigns early. Additionally, productivity, team cohesion, and morale suffer, which has a financial impact. Total replacement expenses for each person can range from 90 percent of an employee’s compensation for entry-level workers to 200 percent or more for professionals and leaders with extensive experience.
- Effective recruitment and training
By concentrating on staff retention, businesses are able to cut recruitment expenses and increase training returns. Recruiting expenses consist of amounts paid to recruiters or for advertising the post, travel expenses associated to interviews, and possibly signing incentives. Next is training, that can also be expensive. Those funds are lost if the employee quits before the end of the contract.
- Improved productivity
It tends to take time for a new employee to become familiar with the system and work at a level similar as their predecessor, which reduces productivity. It is also taxing on the remaining workers, who must take on additional responsibilities and may offer low work as a result. In contrast, high-retention workplaces typically have more engaged employees, who are consequently more productive.
- Increased employee morale
Successful employee retention initiatives generate more connection and engagement, which boosts morale and, in turn, increases employee retention. In contrast, a regular outflow of employees has a negative impact on workplace morale, resulting in a decline in work quality and the departure of additional employees.
- Experienced employees.
It goes to logic that the longer workers stay with a business, the greater their commitment, expertise and knowledge. Additionally, they have developed beneficial ties with consumers and coworkers. When an employee leaves a company, the business incurs an opportunity cost based on the potential value the employee may have provided.
- Better client/customer satisfaction.
It’s possible that unskilled and inexperienced new employees have a higher risk of making mistakes that have a negative impact on the customer experience. Employees who have been happy with their jobs for a longer period of time tend to be more skilled at interacting with customers and may have formed positive relationships with those customers. This is the case during all stages leading up to a legally binding contract being signed, as well as after sales, when a customer may get in touch with customer care. An exceptional level of customer service may also act as a crucial point of differentiation for the brand.
- Improved employee experience and satisfaction.
The retention of employees, employee satisfaction (worker happiness and fulfillment), and employee engagement all have a mutually beneficial relationship with one another (worker commitment to their roles). Employees who are happy with their jobs and interested in their work tend to have a greater likelihood of staying with the company for which they work, while companies that have a high percentage of employee retention often report higher levels of employee happiness and engagement.
- Stronger corporate culture.
A company’s culture evolves through time depending on the accumulated characteristics and interactions of its personnel. When employees who are engaged and connected with an organization’s culture remain, they build its ethos. Additionally, a robust corporate culture increases productivity and performance.
- Increased earnings.
Anecdotal evidence suggests that retaining staff can also have a favorable influence on income, which is in addition to the cost savings that can be realized by doing so. Employers who have higher employee retention rates are more productive, provide a better experience for both their employees and their customers, and are able to keep their most experienced and talented employees, all of which can help to the company’s growth.
Finally, if you like to know more about how WorkCompass’s software can improve your employee retention. Please get in touch and request a demo with our team.