Employees are arguably an organization’s #1 asset. Without employees, nothing happens in the workplace. Therefore, recruiting high-quality employees is a top priority for managers, as this caliber of employee can lead to higher productivity, better customer satisfaction, increased revenues, strong team culture, and so many other aspects of a successful organization. However, just as recruiting top-notch team members is a high priority for managers, retaining these employees is crucial. Before we get to costs of lost employees and why employees choose to leave, let’s look at the current statistics surrounding employee retention in order to get a clearer picture of employee turnover in the workforce:
- 32% of employees are satisfied in their current jobs
- 37% of employees are actively looking for a new job
- 57% of employees are open to looking for a new job
- 25% of employees are choosing to leave their jobs
- Employees who are given opportunities for growth and flexibility are 400% less likely to leave their jobs
- Almost 67% of employee turnover is preventable
Why do employees choose to leave?
While these statistics can feel daunting, the fact that two-thirds of employee departures are preventable can be a cause for concern for any manager. While leaders can’t control all of the reasons employees choose to leave their jobs, they can control many of them. Here are some common causes for employee turnover:
- Competitive offer from another organization
- Burnout—feeling overworked
- Family or life event
- Poor management and/or leadership
- Lack of recognition
What are the costs of losing an employee?
Recruiting high-quality employees can be time-consuming, frustrating, and a long and tedious process. But in addition to the loss of time and the added frustration, replacing an employee can be costly in other ways: Disruption within the team, possible additional work for team members who pick up the slack, potentially lower productivity and revenues, possible disruptions in client service, and the loss of knowledge, ideas, and innovation that employee offered to the organization. Replacing an employee can also be financially burdensome, requiring from 50-200% of the lost employee’s annual salary. In some cases, expensive litigation can be another consequence of an employee’s departure. Lastly, it can take 1-2 years for a new employee to reach the level of performance similar to a departed team member. Since losing a high-quality employee can be costly in numerous ways, it’s crucial that managers put as many employee retention strategies in place as possible to retain their most valued team members.
12 Strategies for Employee Retention
While this list of strategies might feel overwhelming at first, focusing on them one-by-one based on the needs of your team can make an almost instantaneous difference in both team morale and culture, resulting in greater retention of your most valued employees.
1. Hire wisely. The best way to retain employees is to spend the time and effort to hire high-quality employees in the first place. According to one study, 80% of employee departures is due to poor hiring decisions by management. This strategy, alone, can increase team member retention and benefit the entire organization long-term as well.
2. Onboard for success. A well-developed new employee onboarding process is crucial for retaining employees, as 40% of employees who experienced a low quality onboarding process left their jobs within the first year according to one survey. Ensure that new team members have the tools and knowledge they need to be successful from day 1, which can exponentially increase their chances for success and long-term membership on your team.
3. Create and continually nurture a strong team culture. The strength of a team’s culture can make the difference between retaining and losing employees. In fact, the majority of employees, 71% based on one study, would remain in a team with a strong culture even if they could make more money elsewhere. Conversely, 33% of employees surveyed in another study stated that a toxic company culture was one of their top reason for wanting to quit their current jobs.
Learn more about how to create and nurture a strong team culture here.
4. Get to know your team. This is not a one-and-done task, and it will take some time and effort, but it can make a tremendous difference in not only the team environment, but in employee retention as well. Learn about each team member’s long-term career goals, their interests, their home life, and so on, keeping in mind the importance of retaining a leader and team member relationship. In other words, don’t get too personal. The key here is to show that you care about them as a person, not just as another name on the payroll.
5. Listen. Simply listen. Listening is one of a manager’s top tools for employee retention, team productivity, and nurturing a strong team culture. We often listen to reply, but when we do that, we’re missing the majority of what someone else is saying. When it comes to communicating with team members, concentrate only on what they’re saying, pause a few seconds before responding, and then make sure that response demonstrates you truly listened to what they were saying, you understand as best you can what they were saying, and that you value what they said.
Want to become a better listener? We’re sharing 8 tips here.
6. Create opportunities for professional development. How important are these types of opportunities? Only 38% of departing employees were given the opportunity for career development according to one study, which is problematic since high-quality team members often seek to further develop skills and experience in their careers. Offering continuous professional development can not only improve the productivity of your team now and in the future, but it also reflects their value on the team as well.
7. Show appreciation. Employees want to know that they and their contributions to the team are valued, and this appreciation is much more impactful when it comes from their leader. Employees who feel valued and appreciated will often go above and beyond when needed, even when it means putting in extra work, time, and effort. Make sure that this appreciation is given authentically and often so that your high-quality employees don’t become part of the 79% who reportedly quit their jobs due to a lack of appreciation from their leaders.
8. Compensate fairly. It’s safe to say that everyone wants to be paid fairly for the work they perform. If employees don’t feel they’re compensated fairly, they’ll look for other work opportunities elsewhere. In 2021, a year included in the “Great Resignation” trend, it was reported that 37% of employees left their jobs due to low pay. It’s important to reevaluate job performance, team contribution, growth in skills and education often and adjust compensation accordingly. Even though they are potentially compensated more, top-notch employees will often produce enough to offset their salaries and more.
9. Intervene early. Conflicts between managers and employees and/or between team members will happen. 85% of employees surveyed in a recent study back up this fact. The key to controlling the toxicity of conflict is to be vigilant and intervene ASAP when issues occur.
Learn more about how to handle conflict in the workplace here.
10. Ask for feedback often—both for gauging team and manager effectiveness and for project and task collaborations as well. Employees often have ideas and skills that could contribute to the team’s success, so ask for feedback and then use it. How important is feedback? One survey found that 51% of departing employees were not asked about job satisfaction or their career goals in the three months before they decided to leave the organization, and 52% of departing employees in another study shared that feedback was not received or used by leaders.
11. Pay attention to employee workloads and adjust when necessary. Employee burnout is real. In fact, 74% of employees surveyed experience burnout. Employees who are burned out will either stick it out, which can negatively affect their productivity and the culture of the team, or they will look for work opportunities elsewhere. Depending on the leader-employee relationship, some employees might not feel comfortable initiating conversations about an overwhelming workload, so it’s important to take the lead and gauge how each team member is doing bandwidth-wise and then work with them to prioritize tasks and responsibilities, even if that means removing some tasks from their work plate.
12. Make DE&I a priority. Diversion, equity, and inclusion has become a much-needed focus in the workplace, and it’s the responsibility of leaders to initiate needed changes where DE&I is concerned. This can be accomplished on both team and individual levels, and communication is key to uncovering any instances of bias and exclusion. If any aspect of diversion, equity, and inclusion is lacking in the workplace, valued team members will go elsewhere to have their needs fulfilled.
Employees are vital to a successful organization. Team members who are not feeling seen, valued, and heard will seek better opportunities elsewhere, resulting in costs over and above those reflected on the balance sheet. Therefore, it is crucial for managers to continually focus on retaining high-quality employees, ensuring that they will be high-quality contributors now and for the foreseeable future.
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