Cost of Turnover and Ways to Retain Employees
ARTICLE WRITTEN BY INSIGHT EXECUTIVE SEARCH
Since the cornerstone of success for most companies hinges upon innovation, it’s imperative to keep in mind that employees are an organization’s most important resource.
Surprisingly however – – most companies don’t invest the proper resources – nor make the necessary commitment – to considering effective employee retention strategies.
The Cost of Employee Turnover
Josh Bersin, founder and Principal at Bersin by Deloitte, writes that many studies show that the cost of losing an employee can range from tens of thousands of dollars to 1.5 – 2.0x the employee’s annual salary. These costs include hiring, onboarding, lost productivity, training, and internal company impact.
Bersin describes employees as “appreciating assets”, i.e. the longer they are with a company, the more knowledgeable they become of the company’s systems, projects and culture and the more value they provide.
A paper posted by the Center for American Progress writes that jobs that are very complex and that require higher levels of education and specialized training tend to have high turnover costs.
This data is quite relevant when trying to retain highly skilled and sought-after researchers.
What Can You Do To Retain Employees?
Higher salaries will not compensate for a negative or toxic work environment. Well-paid unhappy employees will look for happier pastures. As the saying goes, money isn’t everything.
So, what can be done?
Growth is important to happiness and satisfaction; every living organism must grow. Providing employees with opportunities for growth should be an essential component of the company structure. This will also help in attracting new employees.
Opportunities for growth can include promotions, project leadership, subsidies for continuing education, conference participation and time allotted for research and publishing.
According to Gallup, 87% of employees worldwide are not engaged at work. At the same time, companies with highly-engaged workforces outperform their peers by 147% in earning per share.
Below are a few examples of ways to engage employees:
1. Make your employees feel like they are invested in the company, both from a financial perspective and the overall success of the company.
2. Discuss what is taking place in other areas of the company. Ask for suggestions and ideas. Engage employees in the overall company dynamics.
3. Invite less senior employees to senior management meetings to share ideas. Show they are valued.
4. Give new tasks which provide employees with greater responsibility. This will also increase their knowledge and experience.
5. Ask for feedback on what is working and what is not. Show you value the feedback. Have daily or twice-a-week meetings to discuss projects and assignments.
6. Assign more experienced employees to mentor newer staff members. Most people like to mentor. It will also create positive relationships and a sense of responsibility.
7. Compliment and acknowledge successes and hard work.
Workers want to feel their work is having an impact, both on the company and the world at large.
For example, if an education research organization disseminates a report on the growth and success of education technology in elementary school classrooms, the employee who authored the study will feel good in knowing that the report will not only help their company, but also aid its larger mission of improving the nation’s public education.
When employees know that their work makes an impact, they will feel how all the hours they devote each day is worth the effort!
Develop a workplace that acknowledges that employees matter as human beings whereby people respect and appreciate each other. In short, an environment where employees feel their employers are genuinely concerned for their welfare.
Employees will feel happier knowing they are surrounded by people who don’t just want to receive from them, but truly have their best interests at heart.
While income and job security are important, the overriding factor contributing to employee retention is a positive workplace. Growth, engagement, impact, and care are essential.
Not only will you save money in turnover costs, but your workplace will foster much more positive interactions for both you and your workers!