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\nSummary.<\/b> Employee retention is the measure of how many of a business\u2019s employees remain with them over a period of time. In most cases, it\u2019s expressed as a percentage, such as having an 85% retention rate.<\/p>\n<\/blockquote>\n<\/div>\n
Sometimes the opposite side will be expressed instead. That would be called the turnover rate. Turnover has to do with how many people leave. So, for the above example, it would be a 15% turnover rate.<\/p>\n
Key Takeaways:<\/b><\/p>\n
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Employee retention is how many employees an organization keeps over a period of time.<\/p>\n<\/li>\n
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The better the salary, benefits, and culture of a workplace, the higher the retention rate it\u2019s likely to have. In other words, the more positive things an employee gets out of their workplace, the more likely they are to stay.<\/p>\n<\/li>\n
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Employee retention has several benefits, including lowering costs, limiting disruption, higher productivity, and less time and resources spent on training.<\/p>\n<\/li>\n<\/ul>\n
What Is Employee Retention?<\/h2>\n
Employee retention<\/a> is how well an organization is able to keep its employees. In other words, if a business has a high retention rate, then very few of its employees leave for other opportunities. Of course, it\u2019s impossible to have no turnover \u2013 people retire, move, or change careers \u2013 but the higher an organization\u2019s retention rate, the better.<\/p>\n
Retention is typically expressed as a percentage. For instance, a company may have a 75% retention rate over a five-year period. That means that 75% of the people that the company employs have stayed with the company over the past five years.<\/p>\n
That wouldn\u2019t be a very inspiring retention rate, as most experts consider a 90% retention rate or 10% turnover rate to be ideal.<\/p>\n
Why Is Employee Retention Important?<\/h2>\n
Low turnover has a lot of benefits for the organization. And with the often mentioned Great Resignation<\/a> and the worker pool shrinking due to the pandemic, it\u2019s become even more important. The benefits of retaining employees include:<\/p>\n
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Lower cost.<\/b> Hiring and training are expensive. The more often a company has to hire and train new people, the more money they\u2019re spending that isn\u2019t getting an immediate return. Employees are an investment, and not just in terms of their salary. And for a business to run in the black, it needs a good return.<\/p>\n<\/li>\n
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Limited disruption.<\/b> Both resignations and new hires are disruptive. In both cases, duties are reassigned, and the workload shifts. For a resignation, there are usually fewer people to do the same amount of work, not to mention the knowledge that\u2019s walking out the door.<\/p>\n
Though new hires do end up reducing workload and upping productivity<\/a> in the end, there\u2019s a period where productivity drops. That\u2019s due to how much time it takes to train a new employee, as well as slot them into the company hierarchy and culture.<\/p>\n<\/li>\n
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Higher productivity.<\/b> If someone stays with an organization for a long time, they get used to the way that things operate, as well as the best way to go about things. They also get to know the other people who work there, so they know who to go to when they hit a snag. All of this leads them to be more effective and productive with their time.<\/p>\n<\/li>\n
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Less training time.<\/b> Training takes a lot of time. And even when the official training period is over, it still takes a while for new employees to become fully familiar with the new work environment<\/a> and be as productive as they can be. It also reduces the expense associated with training programs and the time other employees have to invest in it.<\/p>\n
Employees that an organization retains are usually already trained and gain more training along the way. However, it doesn’t need to be as condensed, and even if they end up needing training for a promotion or lateral shift, they don\u2019t have to familiarize themselves with the company culture or operations.<\/p>\n<\/li>\n<\/ul>\n
Best Ways to Improve Employee Retention<\/h2>\n
Now that we\u2019ve gone over the benefits of retaining employees, you may be wondering about the most effective way to achieve that. It\u2019s important to note that different people value different things, but there are some strategies that work well across the board. If you can manage it, it\u2019s best to select a combination of them to appeal to as many people as possible.<\/p>\n
These include:<\/p>\n
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Competitive salaries and wages.<\/b> The primary motivator for people to take a job is the pay. Offering a competitive salary is going to make your employees less inclined to jump to another opportunity. They\u2019ll also feel like they\u2019re properly valued and appreciated if you pay them a competitive wage<\/a>.<\/p>\n<\/li>\n
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Excellent benefits.<\/b> Benefits are part of the package of compensation. But if you can\u2019t offer a high salary, then giving excellent benefits can be another way to retain top talent. Health insurance is a major consideration for most workers, and if you can also offer vision, dental, and life insurance, then that adds.<\/p>\n
There are other varieties of benefits, as well. These include retirement accounts, paid time off, tuition assistance, disability insurance, paid parental leave, and severance packages. Also, in general, the more customizable the benefits, the more pleased employees are with them.<\/p>\n<\/li>\n
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Career development.<\/b> While an employee may like the compensation<\/a>, culture, and even their coworkers, if they aren\u2019t able to progress in their career, they\u2019re going to feel stuck. This doesn\u2019t have to relate directly to promotions, either. Most careers only really offer tracks into management, which not every worker wants to go into.<\/p>\n
If you offer further training and pay raises for whatever track your employees are on, that\u2019ll allow them to look ahead. Everyone wants to advance in their career, and giving them the tools and opportunity to do so is going to encourage them to stay with your organization long-term.<\/p>\n<\/li>\n
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Make rules and expectations clear.<\/b> Having confusing, inconsistent, or labyrinthine policies is going to be irritating and off-putting to employees. Workers want to know what they’re supposed to do and what their expectations are.<\/p>\n
If you\u2019re able to make that clear and take note when they exceed expectations, then that fosters a positive work relationship.<\/p>\n<\/li>\n
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Offer telecommuting.<\/b> While not everyone is on board with working from home<\/a>, most younger workers prioritize it. The pandemic changed the way that a lot of offices operate, and telecommuting is here to stay. Offering the possibility to work from home on a regular basis is a benefit that catches a lot of people\u2019s attention.<\/p>\n
You can offer this full-time or part-time. For instance, you can give people the option to work from home on Fridays. In most cases, the more time you can offer for people to work from home, the more attractive it\u2019ll be.<\/p>\n
The pandemic also made people more skittish about going to work sick or working with others who are sick, which makes this option serve a dual purpose.<\/p>\n<\/li>\n
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Embrace flexible schedules.<\/b> If you can\u2019t manage to offer full-time telecommuting<\/a>, then a flexible schedule is the next best thing. The less rigid your business is about the standard nine-to-five schedule, the more your workers will appreciate it. This would push your model towards a results-driven assessment rather than a time-based one.<\/p>\n<\/li>\n
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A comfortable office.<\/b> If you can\u2019t offer working from home \u2013 or even if you can \u2013 the more inviting your office is, the better. While a lovely office won\u2019t make up for other important shortcomings, it makes going to work more pleasant.<\/p>\n
Remember that people spend a lot of their life working, and it helps to make it as positive an experience as you can.<\/p>\n<\/li>\n
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