In a tight labor market, employers have a difficult time attracting and recruiting top talent.
The problem compounds when organizations watch tenured employees bound off to other destinations. Thus, a central focus from HR departments becomes not only finding qualified employees but also keeping them in the seats for the long haul.
Employee retention matters from a number of angles.
Replacing a skilled worker holds financial implications. It also causes management to examine retention strategies aimed at fostering long and fruitful employee relationships.
As organizations come to understand the reasons behind the departures, they must also find ways to address them. A quick fix won't do the trick. But identifying issues and finding solutions starts the process off on the right foot.
Employers feel the impact of employee turnover on their budgets. Gallup estimates the cost to replace an employee at one to two times the salary of the departed individual. Extrapolate that figure across an entire organization and the number has significance.
Where do these expenses stem from? They arise from a combination of areas. Some facets present as easier to measure than others. Employers cite lost productivity as one source of leakage.
Another Gallup study estimates a global $8.8 trillion in losses due to a lack of employee engagement. Loyalty and engagement take time to build with new employees.
Along with hard costs, soft costs also factor into the equation. Onboarding and training a replacement employee shifts managerial focus from activities that could generate revenue or enhance the bottom line.
Employee retention benefits hold organizational importance for other reasons.
If pictured as a desirable workplace destination for top talent, internal stability and cohesiveness create an appealing image. Prized candidates seek employers that offer chances for long-term personal growth and career advancement. They want a place in which they can professionally flourish. They crave a better balance of work and home life.
The foundation of such an organization rests on building blocks espousing company culture.
Creating an atmosphere of encouragement and appreciation helps foster employee engagement. In turn, loyal employees help retain and groom organizational knowledge. Committed employees ultimately develop mutual trust which results in dynamic teams and organization-wide chemistry.
Retention ratios measure the successes or shortcomings of retention techniques. To improve these numbers, employers must pursue some specific directives.
The success of these campaigns will hinge on attention given to employees as members of the workplace and the world outside it.
Inside the organization, opportunities to sharpen skills and advance through the ranks offer promising professional incentives. Nurturing employees in this manner can have multiple positive outcomes. Retention will improve accompanied by a more capable overall workplace.
Embrace the process by imbuing employees with technical training. Allow them to develop soft skills, also. Along the way, this push and promotion produces capable personnel who understand roles and conquer inevitable internal and external change.
Overarching goals for an organization sit within reach. Objectives get met when all the pieces of a united workforce fit together.
By encouraging and guiding individuals, you can measure success throughout the organization. Long-term retention of talent allows organizations to grow and prosper from a competitive standpoint. Plus, a strong competitive position helps stimulate organizational drive.
The individual outcomes, therefore, that feed into the organizational mission will serve two primary purposes.
On one hand, they will spur internal ideas and innovations needed to keep pace in the marketplace. Additionally, keeping employees around for the long journey will help trigger improvements in places like operations, customer service, sales and marketing, etc.
In essence, the sum of these person-by-person advancements will grow greater than the whole.
As much now as ever, HR professionals must recognize the critical nature of employee retention. A poor track record with employee exodus can indicate financial and philosophical company issues. Mandates like exit interviews might help organizations get a feel for areas they need to address.
Important first steps to improve retention involve identification and honest attempts at resolution. Eventually, a transformation will occur when organizations consider the personal and professional needs of their employees. But, organizations must endeavor to put the initiatives in place, one foot in front of the other.
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