8 reasons why employee retention is important, employee retention, how to improve employee retention, advantages of employee retention

Top reasons why employee retention is important ⚡

What is common between Cincinnati children’s hospital medical center, Zappos, Hyatt Hotels, and Airbnb?

They are ranked top among the best places to work…

and have extremely high employee retention!

So how do they do that?

These days, employee turnover is now a norm – you see employees moving from one organization to another within a short period.
The actual reason for the shift is no longer as a result of family concerns as it used to be. There are now lots of reasons why employees decide to leave their organization.

In most cases, employees now leave their organization as a result of dissatisfaction with their current work, or to look for better opportunities elsewhere. Even within these two frames, there are still other minor reasons.

No matter what the reason might be, it is the job of the organization to maintain the employees they have. A lot of organizations pay less attention to the needs and welfare of their employees; they treat them like that are a dime a dozen.

These companies think that replacing workers is easy even up to their best worker. The truth is, in today’s tricky economy, with the shortage of talent in the labor market, these organizations are wrong!

Great businesses understand the importance of keeping their employees for a long time. In doing so, they reduce the cost that comes with time and money, which is necessary to replace an employee – which could devastate the company’s bottom line.

The emphasis on employee retention cannot be denied. In the course of this blog, we’ll be discussing why your hiring shouldn’t stop when you have recruited the talent. It should go as far as that.

Need some more convincing as to the importance of employee retention?

8 reasons why employee retention is important

  1. You Can’t Build a Business Without Consistency.

    When your work environment is always evolving, it will be difficult for you to maintain any form of momentum
    Instead of focusing on more significant goals to help the company grow, managers adopt a different task to train new hires.

    It is impossible to build a successful company with employees going and coming at a fast pace, and managers are spending time on employee training instead of business growth.

    The longer employees stay at the job, the more skills they acquire. Theoretically, this means that the best workers are ones who stayed for the longest (though this is not always the case).

    Let just say one high drive for ROI is employee retention. You can’t expect more from a team that is full of rookies. Increase the strength of your business by keeping your employees on board.

  2. Turnover Crushes the Bottom Line

    Based on the research by the Center for American Progress, replacing a talent cost almost 20% of the employee’s salary. High turnover implies that when your employees are always leaving (high rate of employee turnover) in search of greener pastures, you find yourself in a position where you have to spend over two months’ worth of the employee’s salary, just to find a replacement.

    And if high turnover becomes a norm for your organization, that’s quite a lot of spending for an organization. Businesses that find themselves always replacing their employees will realize sooner or later that their bottom line is severely affected by high turnover.
    When you pay more attention to employee retention, you get yourself a team that knows how to carry out their duties adequately based on experience and get to enjoy a considerably heavier corporate purse.

  3. You Lose Talent and Ideas

    When you push your best employees to the point where they start seeking employment in other companies, in addition to just having to replace them with the new ones, you’re losing great talents as well as their institutional knowledge.

    Although there are techniques that can be put in place for companies to retain institutional knowledge — documentation, internal Wikis, etc. — they can never measure to a person with a hands-on understanding of the specific process.

  4. It’s Difficult to Establish Camaraderie With a Transient Workforce

    Research has shown that friends are the number one thing that people enjoy most in their job. How do you expect your employees to develop such strong bonds with one another if, at some point or the other, team members are continually leaving the organization? It doesn’t now paint a good picture of your business or the work culture.
    The more camaraderie exists among your employees, the easier and faster it is for them to help each other out and to provide the necessary support. By focusing on improving employee retention, you’re much more likely to build a tight-knitted team and stick around for the duration.
    Losing an employee is okay from time to time. But if you need a team that gets along well and works well together, you should never let it become the rule rather than the exception.

  5. Customers Notice When Names Change

    Your customers have certainly been talking with your employees since they joined your firm. When they notice that the people they’ve gotten used to having left the company, it can put a bad taste in their mouth, leaving your future working relationship with that organization in some level of doubt.

    Everybody understands that employees move from business to business to fulfill their career goals. However, such an act shouldn’t be a typical incidence.

    The last thing you expect to see is to move a company account from the employee that just left for a new one and having to move again soonest because the new one is going too. It deals with the confidence customers have in your firm or company.

  6. Job Seekers Notice Too

    Thanks to some websites, it’s now easier for employees to see what working in some organization looks like – even if you just found out that an organization exists in the first place.

    For example, according to Software Advice, at least 50% of candidates during job search make use of Glassdoor.
    If you have a high rate of employee turnover, then your image on sites like Glassdoor is taking a severe hit. When job seekers are searching for a new gig, they may very well stumble upon terrible reviews of what it’s like to work for your company.

    I don’t think anyone would want to apply for a job that tons of people took their time to tell other candidates that they hated.

  7. Always Training New Employees Is a Waste of Resources

    Those managers you spent your time and resources to hire, you didn’t hire them for them to pay time training recruits over and over again. You hired them to grow your business and develop your employees.

    With a low employee retention rate, your managers end up spending time training and retaining employees instead of doing other profitable things. Who will have the time to focus on the bigger picture?

  8. Your Competitors Could Benefit Directly

    When a talented employee is lost – the person decides to move across the country or go back to school or even switch industries. Or let’s say they decided to go for your competitors – the one that employee sees as most respected and offers its employees the best perks.
    Worse yet, imagine your competition went on the offensive and approached your employee first.

    In any case, when you lose a member of your staff, there is a high chance that such a person ends up working for your competition. Imagine seeing your former employee growing at a competing firm. Think about the wasted potential.

    The easiest way to make sure that your competitors don’t have a share of your amazing employee talent is to improve your retention. Offer employees more perks, more money, and more benefits. Let them work where they want when they want.

    Host events like a company happy hours. Take a day off once a quarter to give back to the community and undertake team-building exercises.
    Do everything you can think of to make their life as employees better. They will stick with you.

CONCLUSION

Here is this amazing TEDx talk on employee retention by Claire Kemp –

The more time an employee spends in the organization, the more experienced they become, both in your industry and also in your specific approach to business, which is invaluable. They will be in a better position to talk about and promote your brand to customers and clients.

See how Beamfox can help you increase your employee retention with candidate pre-boarding? Book a demo today.

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