What is Employee Retention?
Employee Retention refers to the strategies, policies and processes implemented by an Organisation in order to reduce employee turnover and retain its employees. Employee retention should not apply to all individuals, instead these strategies should be targeted to high-performing employees that an organisationneeds to maintain in their workforce and culture.
Employee retention can be measured as a percentage rate. Over the course of a year, if 5 out of 10 employees leave an organisation, then the employee retention rate is only 50%. The higher the retention rate the better it is for the organisation.
What is Employee Turnover?
Employee Turnover is the process of replacing one employee with another. Employees can leave for a variety of reasons; termination, resignation, retirement, transfers, illness etc. A high turnover rate can negatively impact a company’s productivity and efficiency, since employees take skills and knowledge with them when they leave, and recruiting and training a replacement can be a time consuming and costly endeavor.
A high turnover rate is also an indication of unhealthy work practices or a hostile work culture, and is an important indicator of identifying policy, managers or processes that are counter-productive to organisational and employee well-being. Many organisations track turnover rate by departments, demographics (women vs men), business units or teams for this reason. Before implementing employee retention strategies, it is important to identify the root cause of the turnover rate in order to fix those issues first.
What is the cost of a High Employee Turnover?
Studies indicate the cost of replacing a productive employee can range from 50% – 200% of their annual salary, depending on their position, role, responsibilities and specialised skills they bring with them.
In addition, it can decrease the overall efficiency, productivity and competitiveness of an department, team or company, thus also impacting potential revenue.
Employee Retention Strategy 1: Coaching & Mentoring
Pairing promising individuals with compatible senior leaders and managers can help reassure individuals of their growth and career progress in the organisation. In addition, coaches and mentors can help teach these individuals valuable skills and knowledge gained from their own experiences, which would in turn help them navigate challenges in the workplace more effectively.
Employee Retention Strategy 2:Orientation
The larger the organisation, the more time needs to be dedicated to orientation and onboarding of an employee to make them feel included and secure in their new role. While the first few weeks are very important to help align a new employee with internal values and culture, it is important for HR to set up orientation milestones during the year as a way to ingrain them. Employees that resonate with the workplace culture tend to feel a greater sense of loyalty to the organisation.
Employee Retention Strategy 3:Training and Career Development
Each employee should see a future within the organisation in order for them to remain motivated. One way to do this is to map out a career pathway and schedule trainings that will help and enjoy reach their career goals. One thing of note is to ensure that training and development plans are personalized to each employee, to enhance their strengths and bridge their weaknesses. Generic training pathways make employees feel more like cogs than individuals, which in turn can be demotivating.
Employee Retention Strategy 4:Employee Feedback
Employees should feel that they have a voice in shaping an organisation’s culture and future for the better. Leadership and HR need to cultivate a culture of openness that allows employees to express themselves and any criticisms freely. Employees who feel like they cannot voice issues, concerns or challenges they feel or see in a company will feel stifled and are unlikely to remain in such an environment for long periods of time.