8 Benefits of Employee Retention
You’ve probably heard it everywhere: retaining talent is important! There’s a retention crisis! You need a smart retention strategy!
Now, you may be wondering why employee retention is such a big deal. Yes keeping talent is important, but you may be thinking ‘Well, anyone is replaceable so it’s not a massive priority.’ Perhaps this would be true if a) there was an abundance of talent – which there’s not in the UK, particularly due to Brexit, b) if there was no skills shortage – which there is due to Brexit and other factors, and c) if there was little to no competition for talent – which there is because of the aforementioned facts.
The war on talent is on, and while this is massively challenging for organisations, employees have never had it better. Opportunities are greater; employees who aren’t getting their needs met know they can easily jump ship to an organisation that listens to them and takes action. And people-centric organisations know they’re in a powerful position. They’re the one’s who’ll retain the talent and attract them.
So yes, employee retention is critical right now and for at least two more years; and the benefits of employee retention should be enough to get you firing away at building a strong retention strategy.
The Benefits of Employee Retention:
Loss of talent costs UK businesses around £42 billion per year! Costs add up, not only advertising for roles, but the opportunity cost and loss of time taken up by interviewing and screening candidates. Onboarding expenses, like training and management oversight, are also costly. Remember, loss of talent affects productivity – not only because an employee is new and still learning the ropes, but it’s disruptive for other employees who may need them, or who are taking on greater workloads to fill the gap. This can cause low engagement, customer service problems and poor company culture.
Employee morale is greatly affected when employees come and go regularly. Not only does it cause disruption physically, but emotionally too – lost connections, greater stress for employees who have to take on more responsibilities while HR finds a replacement etc. All of these factors will absolutely affect employee engagement, team morale and company culture. Retaining talent will increase morale, employee engagement, wellbeing and culture.
Possibly the greatest cost of high staff turnover is the knowledge, skills, and employee and customer relationships that are lost when talented people leave. Leaders forget just how many relationships are affected and how the loss of co-workers or people that were looked up to in the organisation, impact the remaining employees. It can begin to rub off on these remaining employees who may consider their gripes with the organisation and their level of loyalty, which, ofcourse, can cause staff turnover to spiral out of control. Retaining experienced employees avoids this kind of catastrophe – which is a costly one!
Recruitment and Training Efficiency
As we touched on earlier, onboarding new talent is costly. Not only did you incur costs when you lost the talent and they walked off with the skills they developed after you trained them, but it’s now costly to retrain a new hire. Training takes time – even fellow colleagues may have to stop what they’re working on to train their new team member (causing a drop in productivity), and sometimes training requires financial resources too.
On average, it can take a new hire one to two years to reach the productivity of an existing employee. They have to learn from scratch (and inevitably they’ll make errors occasionally), build customer and co-worker relationships, and feel confident in their ability before their productivity is satisfactory. And if roles remain vacant, an understaffed environment also causes problems, such as employee fatigue due to greater workload and missed targets.
Better Customer Experience
Customer experience is a customer’s perception or opinion about their interactions with a business, from their first interaction to post-sale support. Employees who are new may take longer to get things done and meet customer expectations. They may even make errors or be less adept at problem-solving. In turn, customers might share their negative experiences, putting the organization’s reputation at risk.
Revenue gains stem from reduced hiring costs, increases in productivity, and the delivery of better customer experiences, among others.
Improved Employee Engagement and Satisfaction
A positive employee experience can boost employee engagement and wellbeing, and retention is a huge piece to the employee experience puzzle. Employee engagement is greatly affected when there’s regular disruption amongst teams, open vacancies and greater workloads and when employees feel their potential is being inhibited because of loss of talent and skills.
Have you checked out our Employee Engagement surveys? Through a trusted dialogue with your people, and remedying issues before they grow into bigger problems can help you retain the talent you need.