Are you concerned about employee retention and the effects it has on productivity, morale and your bottom line?
You're not alone! According to Beyond Recruitment, retaining talent is significantly more challenging than a year ago for 66% of business and HR managers. Companies must understand why some employees leave and others stay in an increasingly competitive and fast-paced talent market. Thankfully, there are several tools that HR Managers can implement, such as DISC assessments and HR Surveys, to help support and improve their employee retention activities. This is important for the bottom line and to retain top talent. Understanding what your people value, calculating the economic effect of staff retention and turnover, and controlling and enhancing employee retention are all strategic market advantages.
Business leaders have been scrambling to manage turnover due to widespread talent shortages throughout the past year. As such, the necessity for effective employee retention techniques is becoming more urgent. This article will guide you through the importance of staff retention, the strategic benefits, and what you can do to increase it.
What is Employee Retention?
Employee retention refers to a company's ability to keep its staff and prevent employee turnover, which is the number of people who leave their job in a certain period, either voluntarily or involuntarily. Increasing employee retention has a direct impact on business performance and success.
Several tools and strategies can help you effectively retain top performers from leaving. A successful employee retention strategy utilises these tools. It helps prevent voluntary employee turnover by developing a positive work environment to encourage engagement and offering competitive compensation and benefits and a healthy work-life balance. When businesses reduce voluntary turnover, they avoid unwanted costs and barriers to company growth.
Employers are particularly focused on retaining staff during low unemployment and increased competition for talent. Organisations typically utilise human resources technology for recruiting, onboarding, engaging, and rewarding employees and offering more work flexibility and perks to retain employees.
The Importance of Employee Retention
It's easy to underestimate the damage that high employee turnover can generate. High levels of staff turnover might jeopardise a company's ability to achieve its business goals and objectives. High staff turnover causes many issues, including increased expenses, knowledge loss, and decreased productivity. Some of the challenges related to low employee retention include:
- Loss of valuable skills
- High costs of replacing outgoing employees
- Loss of institutional knowledge and experience
- Risk of damaging customer relationships
- Decrease in productivity
- Negative impact on employee morale
Employees incur increased costs when the business experiences high turnover. They spend many resources attracting and hiring top talent then onboarding and training them. This process also takes important time away from the company and makes it less effective. Strategies for employee retention are important to avoid the negative effects of staff turnover and enjoy a stable environment and great culture.
What are the Benefits of Employee Retention
Companies and managers that can retain their talent will profit from numerous benefits. Here are the top ten benefits of employee retention:
- Reduction in Hiring Costs
- Develop a Highly Skilled Workforce
- Fewer Employment Gaps
- Improvement in Morale
- Increased Productivity
- Positive Workplace Culture
- Increased Revenue
- Improved Employee Engagement and Satisfaction
- Better Brand Reputation
- Strong Employee Loyalty
Reduction in Hiring Costs
Finding new staff can be expensive. Hiring recruiters, training employees, and providing sign-on incentives may add up. According to a survey conducted by Elmo Software and the Australian Human resources Institute, the average cost to hire has doubled in the past 12 months, making it vital to retain top talent.
Other costly concerns that might arise due to turnover include lost productivity, poorer engagement, customer service challenges, and an influence on business culture, all of which compound.
By keeping their employees around, companies can limit these costs. An effective retention strategy is to invest in your current staff through incentives and flexible working arrangements rather than looking for new candidates.
Develop a Highly Skilled Workforce
When employees work for a company for a while, they expand their skill set and gain relevant experience. Not only that, but they'll gain a thorough understanding of the organisation's objectives, business procedures, and customer base and fit in with the corporate culture. Implementing employee retention strategies will guarantee that the organisation has a skilled workforce with the necessary abilities.
Fewer Employment Gaps
Better retention means fewer role changes and personnel shifts on teams. It takes time to hire a new employee. Once hired, they also need time to settle into the team and start to collaborate and perform at their best. If an employee leaves before you can replace them, it results in a gap in their position, meaning other employees have an increased workload and some tasks are not completed. High staff retention reduces turnover and fewer employee gaps resulting in increased productivity.
Improvement in Morale
When valued individuals leave, it can have a detrimental impact on their team members, who lose relationships and may have a greater workload and more responsibility. Effective staff retention strategies may improve morale, increase connectivity and engagement, and create a positive atmosphere in the workplace.
When employee morale is strong, the workplace becomes a more pleasant environment. Employees pick up on positivity and feel their organisation is a fantastic place to work. Employees who feel happy in their jobs are more likely to stay and become strong advocates for their employers.
Employers face dozens of new challenges as a result of high turnover. The most immediate effect is a decrease in productivity. It might take a new recruit one to two years to get back to the productivity of an established employee. Employees that stay with a company for a long time tend to be more productive and engaged. Long-term workers have had more time to develop their skills, can complete jobs in less time, and are more devoted to the company's success. An effective employee retention strategy will ensure high levels of productivity.
Positive Workplace Culture
A high retention rate is a great indicator of a solid business workplace culture. Retaining employees long-term indicates that company culture is healthy, inclusive, and positive. It demonstrates that individuals have a favourable employee experience at your company. A company's employees' beliefs, attitudes, and behaviours shape its corporate culture, which is critical in recruiting and retaining top talent.
Retention issues may diminish the ROI of your talent acquisition strategies, and these expenses can influence your bottom line both directly and indirectly. Tracking revenue growth as it relates to your employee retention strategies is an essential HR metric for demonstrating the ROI of those initiatives. Excellent retention strategies will result in reduced recruitment expenses, productivity improvements, the delivery of excellent client experiences and better revenue gains.
Improved Employee Engagement and Satisfaction
Engaged employees are less likely to quit their job, reducing overall turnover and the associated costs. Research demonstrates there is a strong link between employee retention and engagement. Highly engaged employees are 1.8 times more likely to say they would stay with their present employer in a year's time. As a result, companies that prioritise staff retention strategies have highly engaged employees.
Better Brand Reputation
When businesses can retain staff, it may reflect well on how they operate. When staff only have positive things to say about their employer, it can help a brand's reputation. Top talent in the job market often looks for workplaces with great culture, reputation and other factors affecting their work-life balance. Strong staff retention will help boost your reputation, enabling better customer experiences, increased profits, positive press, and attracting and retaining top talent.
Strong Employee Loyalty
Employees may be more devoted to their company's goals and objectives if they believe their employer supports and values them. They may also feel more secure and at ease while your team or business is going through a transition or a period of uncertainty. They can also serve as corporate advocates and change agents. Loyal employees may assist in onboarding new personnel and keep their teammates calm and grounded during times of transition. Finding strategies to retain employees may boost loyalty.
Top Employee Retention Factors
Did you know that 5% of new hires quit after their first day? Or that 20% of new hires leave within the first six weeks? And that around 30% depart before the end of the first year? And that this figure is significantly higher for younger generations?
Once a company hires an employee, organisations must focus on the process of engaging and retaining them. Investing in attracting and selecting employees and developing them is a waste of time if the organisation is unable to retain them. Considering retention factors when assessing or implementing strategies is a sure fire way to improve employee retention techniques. There are several factors companies can address in their retention strategies to improve their effectiveness. Some of the top employee retention factors include:
- recognition of work
- employee participation
- management credibility
- trust and
- respectful treatment of employees
- learning and development
- diversity and inclusion
- workplace flexibility
Strategies to Improve Employee Retention
Considering the above keys to employee retention. Here are the top five retention strategies to improve employee retention:
- Provide Perks, Rewards and Recognition
- Offer Learning and Upskilling Opportunities
- Emphasise Teamwork
- Offer Workplace Flexibility
- Listen to Employee Feedback
Provide Perks, Rewards and Recognition
Recognising your employees' hard work is critical, and being able to reward them is one method to express that recognition. Perks may also help your company stand out to potential new employees and re-engage current employees while improving employee morale.
Rewards may not necessarily have to be monetary. Intangible gifts assist in demonstrating appreciation in a more meaningful way. Whether public or private, words of encouragement may mean a lot to an employee. Understanding the DISC styles and their prefered way to receive feedback is another great way to ensure your employees get feedback most comfortably. Recognition is critical since nearly two-thirds of employees would leave their job if they did not feel acknowledged by their manager.
Employees feel competent, appreciated and respected when they regularly receive recognition, making them less inclined to explore other job possibilities.
Offer Learning and Upskilling Opportunities
Making professional development a priority for your staff is a terrific approach to enhance retention and make them feel appreciated.
Upskilling is especially crucial now since technology is changing the way we work. When workers upskill, they obtain knowledge and capabilities as company requirements vary. Companies with high training rates witnessed a 53% decrease in employee turnover.
Learning new and valuable skills to aid your employees with their day jobs keeps them motivated and interested. When you invest in the success of your employees, they will invest in you.
Encourage your staff to share ideas and solutions to promote employee participation. You can emphasise teamwork by creating opportunities for cooperation, accommodating individuals' work styles, and allowing everyone to make decisions and adjustments. A DISC Team Workshop is an excellent approach for employees to learn more about themselves and others, improving communication and collaboration. DISC Team Workshops are a fun and collaborative method to enhance trust, rapport, and cohesion in new, developing, and established teams.
Offer Flexible Working Opportunities
Compensation and benefits are one of the seven HR functions. Employee perks are an excellent method to recruit, retain, and reward workers. With 40% of Australian workers expressing that they want to work from home full-time, businesses must consolidate this HR trend from recruiting to staff retention.
Job satisfaction requires an excellent work-life balance. Your employees are more likely to be satisfied in their job role if they have the flexibility to spend mornings driving their children to school or leaving earlier for social occasions when necessary. However, you should be aware that parental leave, maternity leave, and duvet days are part of the current working landscape. Give your staff loyalty, and they will return it in spades.
Listen to Employee Feedback
Employee feedback fosters organisational growth at all levels. When employees receive frequent feedback, they understand what they are doing well and where they can improve. When leaders are open and honest with their staff, they are less likely to leave and become a retention risk. Furthermore, as their performance improves, the quality of their work will also improve.
360-degree reviews and HR surveys are two efficient channels for collecting feedback. These tools allow HR Managers and businesses to gather feedback on the organisation's and leaders' performance. Furthermore, the feedback supports business growth and helps leaders meet the needs of their employees. To reduce staff turnover, practise continuous listening, schedule regular one-on-one meetings, and use employee surveys and 360 feedback tools.
Improve Employee Retention with DISC Assessments
Without question, staff retention has a significant influence on the bottom line. Employee turnover costs organisations a lot of money since they have to re-hire and train new employees. Excellent staff retention strategies save time, money and other resources, but it may also differentiate you as an innovative company with a fantastic culture; take Google and Apple as an example. It will help you recruit excellent talent and also keep it.
Using the right tools, such as DISC Assessments, establishing feedback channels, and providing better training, are all effective tactics businesses may implement to improve staff retention. Extended DISC assessments delve into numerous elements of workplace behaviour to present you with a thorough yet easy-to-understand picture of leaders and their employees. DISC assessments assist us in identifying and onboarding talent and understanding their particular demands, such as their ideal workplace and things that may negatively affect their stress levels. We may also use a DISC assessment to discover how they are motivated and determine the key to offering rewards and incentives that they will truly respond to.
Speak with our team for more information on how our tools can help you boost employee retention.