Employee Retention: It's Importance and Ways To Improve It

Every manager that you come across will have one nightmare for sure: One of your best-performing employees hands over his resignation letter all of a sudden out of the blue. Immediately, you have an entirely different set of challenges to face among your daily duties.

In addition to the fact that you have to discover a replacement for such a gifted team member — it is definitely not a small task considering we live in a time when talented professionals are in high demand — yet you additionally need to consider the effect of this sudden departure will have on the remainder of your staff.

At whatever point an associate exits the door, people do notice. Some may even begin thinking about whether they should begin searching for a new job, as well. That is the reason employee retention and job fulfillment should be a top priority on each organization’s list of priorities, and why making powerful retention strategies to diminish employee turnover is one of the manager’s most important jobs.

We’ve all faced retention battles: turnover, absenteeism, low morale, and slow productivity. Be that as it may, If you are already providing competitive compensation as per the market standard to the employees, what else do you think you can do to make your employees want to stay?

Maybe it is true that employees join your organization to get ahead in their career and get better compensation, however, they remain for the work recognition or acknowledgment. Acknowledgment is that little something extra that gives individuals a positive feeling—about themselves and their manager.

Giving acknowledgment alone won’t actually matter—how you give it can decide your success rate.

Employee retention refers to the organizational goals of retaining its capable workforce and bringing down the attrition rate by adopting and executing employee-centric practices.

Why Is Employee Retention Important?

Every business invests a lot of time, assets, and resources to make their new recruits corporate-ready material and bring them at the same standard with the existing employees. These employees, when provoked or prompted by many defining factors such as lucrative remuneration, comfortable and flexible work timings, or career growth prospects, they tend to look for newer opportunities. Irrespective of the organization’s efforts to try and influence them in any way, it is eventually the employees who take the last call on their possibility of continuing their journey with the organization.

Research has shown that nearly one-third or 33% of the new hires end up quitting their jobs as soon as within about six months of joining the new organization. This is the point at which the management, administration, and human resources team step in and determine the exact reasons for such a decision taken by the employees, leading to improved employee retention.

If skilled potential employees don’t intend to stay with the company, it will be a difficult task to build a successful business. On average, businesses shell out an amount which is roughly equivalent to 20% of an employee’s salary as the cost for employee replacement. However, the genuine value of losing a talented workforce goes far and way beyond monetary considerations. After all, when an employee chooses to look for employment elsewhere, along with the financial and budgetary burden of recruitment and training, the organization additionally loses an individual’s talents and ideas, his thus far accumulated organizational knowledge, credibility, and customers.

Moreover, employers could fall into the rut of adopting a half-hearted approach to train new employees, which could be a gigantic drain on the company’s resources. Hence it’s imperative to have an effective employee retention strategy in place.

If we believe some research estimates, it can cost an employer double an employee’s compensation to replace them when they leave the organization. That cost fluctuates across different industries, but for some employers, it very well may be considerably higher.

Consider the employees you have working for you who have strategic abilities and skills that your business depends on, employees who have reinvented their job or who are such a key part that the thought of them leaving scares you. 25% of all employees are of this nature, what you might consider “high risk” with regards to retention.

How to Improve Employee Retention?

A successful employee retention strategy needs you to consider things from the employee’s point of view. Each employee has their own goals and desires, no two employees will be exactly alike. But one thing that will be common in all of them is that all of them would want to feel appreciated by their employers for the work they do and to be treated fairly. Every person wants to be challenged and excited by the work they do. And even though money is not the biggest motivator still they want to be paid at or above market rates with good perks and benefits.