With a record-high 6.7 million job openings and an unemployment rate persistently hovering around 4 percent, America’s candidate-driven hiring market offers a powerful incentive for even the most satisfied employees to consider job hopping. It’s a good time for companies to ensure they’re doing all they can to increase employee retention and boosting their chances of being seen as a quality employer.
Turnover is expensive. The hard cost of replacing a current employee is estimated at 33 percent of that worker’s annual salary, according to the Work Institute. But high turnover also causes less quantifiable obstacles to a company’s success, including:
- Efficient business operations: Losing a talented employee and replacing them weeks or months later with a new hire who needs time to be trained and get acclimated is nearly guaranteed to cause disruption in the way tasks and projects progress. The collaborative nature of modern workplaces makes this even more evident, as it becomes more difficult to switch out teammates.
- Knowledge transfer: In a high turnover environment, a lack of knowledge transfer can cause delayed ramp-up times for new employees, lack of adherence to best practices and the loss of consistency.
- Workplace morale and productivity: Company culture and high turnover rates are deeply intertwined. High turnover creates a negative environment that tends to reinforce itself. These factors are especially crucial in light of recent trends in employee engagement efforts that increasingly recognize the degree to which collaboration, work-life balance and a healthy office environment contribute to retention. “To be seen as an employer of choice, companies should shift away from a traditional focus on ‘engagement’ and ‘keeping people from leaving’ toward a focus on ‘attracting and inspiring people’ by delivering a fulfilling work experience that aligns personal and corporate goals,” notes Deloitte.
Why do good employees leave?
There are a number of reasons why employees quit. “People leave their jobs because they don’t like their boss, don’t see opportunities for promotion or growth, or are offered a better gig and often higher pay; these reasons have held steady for years,” notes Harvard Business Review.
However, there are a number of other missteps companies make that contribute to attrition:
- Paying uncompetitive wages.
- Failing to provide ongoing development opportunities.
- Not recognizing or rewarding good work.
- Overworking staff.
- Not honoring commitments.
- Limiting creativity.
- Failing to challenge people intellectually.
Solving these issues can go a long way toward retaining top performers.
Retaining Quality Employees
So how do employers ensure they’re creating the right environment to reduce turnover? Here are four strategies to consider implementing in your organization.
- Keep in touch.
Although an employer may feel a sense of relief or completion once a candidate is selected and the job offer is accepted, studies have shown that job candidates often feel uncertainty and fear until the actual start date. Staying in touch with soon-to-start employees can alleviate that anxiety.
- Onboarding sets the stage.
“The speed of the onboarding process and the candidate-employee experience can set the tone of trust for a productive relationship,” notes an Allegis Group white paper “Staying in Front: An Inside Look at the Changing Dynamics of Talent Acquisition.” In addition to establishing an understanding of both what the organization needs and what the employee needs, successful onboarding will reduce the time-to-productivity for new employees.
- Provide performance feedback.
Ensuring that employees feel productive, invested in and appreciated will make them more likely to say no to other job offers and choose to stay on your team. Employers should build a feedback-rich environment right from the start, establishing frequent one-on-one time so that performance assessment becomes an ongoing process of improvement.
The old saying that no news is good news is outdated. Today’s workforce wants feedback — positive and negative — on an ongoing basis so they can continue to improve and grow. Providing continual feedback throughout the year, culminating in an annual performance review, is a low-cost way for employers to help retain the best talent.
- Maintain employee engagement.
An engaged workplace helps create a positive work environment. When employees are engaged at work, they:
- Feel invested in the company.
- Believe they’re doing important work.
- Want to work harder.
On the flip side, the risks of neglecting employee satisfaction can go far beyond creating a negative work environment. A 2017 study by the Engagement Institute found that disengaged employees cost companies between $450 and $550 billion a year.
Maintaining employee engagement begins by developing meaningful employer-employee relationships that serve employee needs to learn and grow. Are they being valued, are they hitting goals, are they helping the company achieve success? Ensuring that your top talent is feeling secure and validated in these ways will help increase employee retention.
To retain top talent — and mitigate the high cost of turnover — it’s a good time for companies to re-examine what’s at stake and implement strategies to increase employee retention.
Dave Poling is executive director at Aerotek. To comment, email email@example.com.