Employee Retention is a Big Issue in Present Times — Why So?
Hiring employees is just a start to creating a strong work force. Next, you have to keep them. High employee turnover costs business owners time and productivity. In present times retaining employees have become a major issue. Too much employee turnover has adverse effects on companies on a large scale.
What does employee retention mean?
Employee retention is the ability, of an organization to retain its employees for a substantial period of time. Most experts opine that a distinction should be drawn between low performers and top performers and of course top performers must be retained even if it means offering them a lump sum retention bonus.
Problem with Employee Retention in Present Times
Nearly all companies witness some amount of employee turnover and in certain industries, the rates are much higher, and also accepted such as hospitality and retail. While most organizations make an effort to retain employees by implementing strategies such as easy job, hands-on-learning experiences, these are not sound strategies. Regardless of the role they play, tenured employees drive far greater value than those who are “cycling through” the business.
Many studies show that the total cost of losing an employee can range from tens of thousands of rupees to 1.5–2X annual salary.
Consider the Real Cost of Losing an Employee:-
· Cost of hiring a new person (advertising, interviewing, screening, hiring)
· Cost of onboarding a new person (training, management time)
· Lost productivity (a new person may take 1–2 years to reach the productivity of an existing person)
· Lost engagement (other employees who see high turnover disengage and lose productivity)
· Customer service and errors (new employees take longer and are often less adept at solving problems)
· Cost of training an employee (over 1–2 years you are likely to invest in properly training an employee)
Above all as employers must remember that people are all they have an asset. Needless to say that we need to appreciate what all we have in form of asset. Therefore, employees must learn to appreciate their resources — which is the first step to retention. The longer an employee stays with an organization, the more productive they tend to get.
These days, employee retention has become an important topic for several reasons. The economy is moving towards a forward curve, young employees want more career growth; sometimes the work environment is not up to the mark; sometimes management fail to motivate young entrepreneurs, and in developing economies the workforce is simply in great demand and the competition for talent is fierce. Added to this are the social media tools such as Facebook and LinkedIn that has made job searches much easier.
It has been proven that high-performing companies have high-performing happy employees. A study conducted by Harvard University revealed that only by making your employees happy can you ensure happy customers. And of course in the process end up retaining employees for a longer period. Therefore, companies should have a proper mission and deep respect for their employees along with providing them a good environment, if they truly intend to retain employees.
Author Bio: A digital media strategist and a content marketer, Sampurna is passionate about writing and blogging. Working as a full-time professional writer for more than five years now, she has been lending her expertise to the online world by penning articles and blog posts on jobs and careers, HR tips and the recruitment industry. She also enjoys reading and travelling.