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Employee retention is the capability and/or efforts taken by an organization to retain or keep its employees.
Employee retention is a buzz word for businesses big or small. A number of studies have been carried out and a number of articles have been published to emphasis upon the importance of retaining employees. Specialists in this field have released guides on how to improve the retention percentage for multiple business types.
Employee retention is usually expressed in percentage. For example, the retention rate of the organization is 80%.
It is natural for organizations to experience turnover. However, there are some industries that experience higher employee churn than others. They are:
Employee retention and employee turnover are the two sides of the same coin, you can, however, choose which side you’d like to flip!
Organizations today believe in retaining their top-performing employees, but it’s not only about the top-performers it should be the same from mailroom staff to the CEO.
Many small businesses are prone to higher employee turnover. These businesses struggle to cope with the perks bigger businesses readily provide their employees. Health insurance, good quality education for the kids, transportation, flexible working hours, just to name a few.
Here are 3 reasons why employee retention should be on top of every business owner’s mind:
For such employees, they tend to run projects smoothly, work efficiently on deadlines and show higher levels of employee satisfaction. On the other hand, when an experienced employee quits the organization, the replacement takes time to come at pace with that employee.
This hampers productivity and has a generally negative effect on the organization’s functioning. To avoid such scenarios, organizations need to take efforts and enhance the training and development programs, helping employees achieve their personal and professional goals.
An outgoing employee usually speaks the truth because he/she has nothing to lose. Thinking that an employee is no longer going to be associated with the organization and therefore it is not worth worrying about him//her is disrespectful. Regardless of the tenure served by an employee, an exit interview is a must.
With such whooping costs, it’s pretty straightforward to understand why employees are more than eager to retain their employees.
According to the Center for American Progress, it roughly takes 20% of the employee's salary to replace him/her. Interestingly their report also says employees with higher skills and education level have a higher cost to replace them which is roughly calculated to 214%.
Many talent acquisition experts believe in the power of employee retention. Retaining the top employees is what separates an average organization to a truly successful one. Having said this, it is impossible to control attrition or not increase your talent pool. You need to keep building your talent pool, at the same time retain your best.
In this next section, we will discuss the factors that lead to dissatisfied employees.
Here are some of the factors leading to low engagement and satisfaction: