One sign of a healthy business is if employees stay at the company in the long term. Ideally, long-tenured employees will progress upwards through the business into roles with more responsibility over time. Below, we explore why this is important and what you can do as a business to improve employee retention rates.
Why is employee retention important?
For a start, there’s a high cost associated with significant staff turnover. Hiring and training new staff is an expensive process: it will take up time and energy from your HR and management team. Moreover, when you lose staff, you lose their institutional knowledge of the business. Even high-quality hires will take time to reach the same familiarity with your business. On top of this, there’s usually a productivity drop when you lose employees. Indeed, research suggests that it can take up to two years for new hires to reach the level of productivity of their predecessor. And on the flip side, by retaining talent you can improve your company culture and enjoy higher employee engagement.
Why are employees leaving?
There can be many reasons for employees leaving. One of the most common reasons is that pay is too low. If employees feel like they’re not receiving the salary or benefits they deserve then they’ll naturally search for a different role that pays them fairly. Similarly, employees will leave if there aren’t progression opportunities too. Aside from salary, workers will look to move upwards in their career and if that chance isn’t available, they’ll look to other businesses.
Employees could also be leaving if they’re worried about the company’s health or management. Workers will have a good idea about whether the business is succeeding and if it isn’t, then they’ll look to join a more progressive company.
On top of this, a toxic workplace could also lead to employees leaving. A toxic workplace refers to a working environment where a company might have – amongst other issues – immoral values, bullying management, or systemic issues with sexism and racism. A survey from banner printing company, instantprint, reveals how damaging a toxic workplace can be for employee retention. Indeed, 55.8 per cent of survey respondents told instantprint that a toxic work environment would be enough to make them switch jobs. As such, you should work towards creating a healthy, nurturing workplace environment to support your staff.
How can companies prevent high turnover rates?
There are plenty of ways companies can prevent high turnover rates, though. For a start, you should create a culture of recognition and feedback: by recognising and rewarding good work, employees can feel themselves progressing. You can tie this in with internal hires and promotions to incentivise development and productivity too. Meanwhile, you can also improve the experience for your employees by listening to them and offering rewards and benefits that they actually want. Finally, hiring the right people makes a difference too. By hiring a diverse group of employees who fit your values, you should end up with a coherent, positive workplace.
Healthy, growing businesses have strong employee retention rates. And you can improve your company’s retention rates by creating a less toxic workplace and by giving employees tangible incentives to grow with the company.
