Retaining the presence of hard-working and talented employees might seem like a seamless task at times, but it often is not. Ensuring that employees are contributing happily to the company requires strategic planning and implementation.
Retaining your best employees can help with both the short-term and long-term goals of a company, and it saves both quantity and quality resources. It also promotes a working environment in which individuals can achieve self-growth goals.
Employee retention is an up-and-coming solution to many management problems and promotes a healthy working space for everyone. It is therefore no surprise that the employee retention benefits for any organisation are numerous. Of the many, the primary being that it saves the company tons of thousands of dollars in turnover costs. This can have long term impacts on the financial aspect of a company, which might take years to recover from. It is especially detrimental to a company when it replaces a senior-level employee, whose absence also means a loss of skill and experience. However, it is also important to note that employee retention is not just about minimising the losses associated with turnover. Retention also requires that the employees and employer be mutually benefitted from their association.
Top experts in the field of Human resource have come up with various employee retention theories that could keep both the employer and the employee happy. This is because experts realise the huge capital and social capital losses that are involved with excessive turnover. These theories are developed with the goal of boosting employee productivity and morale, whilst also reducing turnover hassles. This just goes to show that employee retention is one of the most effective ways of ensuring the presence of a strong and dedicated workforce. Different theories have different primary objectives, and it is up to HR management to test and apply them as they seem fit.
So, what benefits can retaining your employees bring to your overall business. Here are the top 12 ways in which effective retention strategies and processes can benefit your organisation.
Reduced Acquisition and Training Time
One of the primary benefits of employee retention is that it saves a ton of time, otherwise spent in acquisition and training. Turnover, whether voluntary or not, leaves a great deal of work to be done. All of this has to be done on precious company time.
By reducing unnecessary turnover, companies can spend a great amount of human capital and resources. This saved time can thus be utilised to work on future projects and hold important discussions.
Employee retention also ensures that the effortless sailing of the company continues without any major hindrances. It is thus an effective way to make sure the company gets the best out of its man hours. This is beneficial for the employees of the company as well.
Employee Retention Improves Morale
For an office to be truly successful, it must also provide a safe and healthy working environment. When employees see their colleagues and friends getting replaced every now and then, it makes them feel demotivated.
On the other hand, when they witness their peers getting appreciation for their hard work, it boosts them to seek more as well. Such employees are eager to come into the office every day, and go the extra mile to make sure that their work is faultless. Business becomes easy and innovative with the presence of such employees.
Employee retention strategies thus also contributes to employee growth. This includes making sure that employees feel secured about their future in the company and ensuring that deserving employees have access to resources to improve themselves. Such resources can include higher education, specialised training, etc. This will also make them become more skilled in their respective fields.
Sustained productivity flow
Maintaining the productivity flow is perhaps the number one priority for most organisations. This becomes easier to achieve when you have a team of employees ready to give their absolute best, every day.
Stephen King, the CEO of GrowthForce, says that it takes 8-12 weeks to replace a knowledgeable worker, and then another month or two before the replacement gets to full productivity mode. An employee’s sudden leave means a fracture in the supervision cycle, and a ton of time in training others to bring them up to speed with what’s happening. It is the more prudent decision to retain employees who are already well versed with the company’s workings.
Such employees build personal relationships and know the subtleties of the company. They can solve problems quicker, and can also contribute in supervising others.
Reduced company costs
Apart from maintaining productivity, a company must also reduce excessive and erratic costs. To make a substantial profit, all other unplanned costs should be avoided.
Turnover rates are exceptionally higher than one might expect them to be. The Society for Human Resource Management (SRHM) states that it might take up to five times of an employer’s salary to replace them. Another statistics from the Bureau of Labour Statistics showed that the annual overall turnover rate in the U.S. in 2017 was 26.3%. On an average, the cost of replacing an individual employee can range from one-half to two times the employee’s annual salary.
Primary reason for this is that the hiring process is an incredibly expensive process and requires many do overs. The whole process of recruiting – including advertising, interviewing, training, etc – adds up as turnover costs for the company. Moreover, this rate will increase drastically if a higher-level employee leaves. High turnover rates can thus make a substantial dent in the company’s financial resources. Adopting proper retention strategies can help the companies in saving company a ton of money.
Achieve greater Loyalty from Employees
Employee loyalty is one of the primary factors that makes an organisation successful. Dedicated employees feel strongly for the company goals, and strive their best to prove their excellence. Loyal employees directly result in better customer relations as well. Long term employees are better equipped to deal with regular customers, and can provide them with any special care they might need. Loyal employees often go out of their way to contribute to the company. When the employers are assured of their employees’ loyalty, they can venture out to pursue risky projects and meet bigger goals.
Enhanced employee loyalty can be ensured through the use of management strategies towards better employee retention. Regular updates about the employee’ standing also goes a long way in ensuring they stay loyal to the company ideals.
Increased Overall Productivity
With reduced costs and better morale, it is no surprise that companies sustain long term benefits from employee retention. For one, old employees do not have to spend a ton of their time and resources training the replacement employees. Second, a replaced employee means a break in team coordination, which results in delays and overtime.
Hiring processes are often long drawn and require many hours’ worth of debate and deliberation. Social connections also take a hit, and it might take months before an organisation is back to its smooth functioning.
Moreover, management can also utilise the time saved to fulfil advanced skill development in employees. Time and resource management could be looked into to ensure better and faster responses to customer problems. These lead to better customer experience and relations, contributing to the long-term goals of any company.
Better Customer experience
The ultimate goal of any company is to provide valuable service to their customers. Employees can essentially make or break customer relations, especially in sales-oriented organisations. Experienced and skilled employees can solve day-to-day client problems far more easily and in lesser time than new unexperienced employees.
Happy employees carry their satisfaction to their customers too. Their high morale and motivation shine through in their interactions will their clients as well. This helps in earning the company a better name, and help the brand grow in a healthy manner.
All this can be achieved through proper retention policy within the company.
Better Workplace culture
Employee retention helps in creating a better workplace culture for any organisation. Creating a working environment in which employees are on the lookout to better themselves, is the optimal objective of any prosperous company.
A better workplace culture means that employees can speak about issues that they are facing with colleagues whom they know. When such issues are addressed and corrected, employees feel valued. If the peers and colleagues keep changing within a company, employees will feel left out with their issues remaining unresolved.
Maintaining a team of experienced employees
The workforce of a company is its backbone. Acquiring hardworking employees is not an easy task, but it is even harder to retain them. A team of skilled and experienced employees ensure the smooth functioning of the company. Such a team is capable of handling daily projects efficiently and enables the higher management to pursue more advanced goals and targets. This also leads to higher employee engagement, and a better team coordination.
Experienced employees need little to no supervision, and can be expected to excel on their own. They can in fact, mentor others and help them learn the nooks and crannies of the company.
On the flip side, if an experienced employee leaves, they also take their gathered knowledge and expertise with them. This could be hugely costly to the organisation, as competitors could use this expertise to pose potential threats to the business.
Another benefit of employee retention is that a team of experienced employees can be relied upon in difficult situations. For instance, in the absence of superior authority, they can make better judgements. They can also understand company policies better, and act accordingly.
Seeing others get promoted and appreciated for their efforts is a huge boost for many employees. It motivates them to believe that their contributions will be rewarded, and that they can move up the corporate ladder. This in turn enhances the cultural ethos of the organisation.
Skilled employees lend a good name to the company and the brand they are associated with. When employees feel connected to the company brand, they strive for perfection in their tasks. In turn, this becomes the cultural attitude of the company at large.
While improving the company culture might be a time-taking initiative, it can reap great gains for the company in long-term goals. It helps attract not only customers, but also capable and skilled employees, who want to be associated with such an organisation. The enhanced culture leads to a healthy working environment in which employees feel connected to their work. This motivates them to take on tasks and goals that would be beneficial to the company at large.
Rising productivity and boost in employee morale are essential to ensure that the company does not remain stagnant in terms of revenue gains. Effective retention policies can ensure that talented employees remain within the organisation and continue to bring in huge amounts of revenue.
Satisfied employees own the responsibility to take the company to new heights and have better and newer initiatives to achieve that. More revenue would also mean that employees are rewarded better, thus continuing the cycle.
While there are innumerable benefits to employee retention, there are also a few things to keep in mind while thinking of ways to retain employees. Of late, factors like work culture, flexibility, and reward system have emerged as crucial factors in employee retention rates. Therefore, it is only natural that companies that can maintain these parameters harbour far more prompt and polished employees.
It is no secret that a masterful group of individuals can change the fate of any organisation. As such, it is important to try and achieve employee loyalty and to make them feel wanted and valued.
HR policies are being increasingly targeted at ensuring the job satisfaction of deserving employees for this very reason. It falls on HR to make sure that talented employees are able to achieve their fullest potential, and act as responsible members of the organisation.
Similarly, it is also not surprising that companies strive to save a host of different resources by retaining the majority of their workforce. Of course, some amount of turnover is unavoidable – and even healthy, but excessive turnover comes with huge costs and hassles. This includes the hours of company time wasted in lost productivity, and time spent in building informal connections.
All of this can be avoided by simply leaning how to keep your employees satisfied and have them look forward to their future in the company. With the right motive and direction, employee retention can be a painless task, and can bring your company boundless benefits.