One of the greatest challenges facing businesses in all sectors is employee retention. We are working in an era of greater choice than ever before for candidates: ambitious professionals have many options open to them, are aware of the value that their skillsets bring to companies and have the tools available to market themselves and find new opportunities with greater ease than ever before.
So, what can companies do to prevent high levels of staff turnover? Is this a problem that can be solved?
High staff turnover: why it matters
Staff turnover rates vary widely from business to business; reported to be, on average, 18 per cent, service industry sectors such as the retail and restaurant industries have been running on employee turnover rates as high as 65 per cent and 73 per cent in recent years.
The negative impact of a high staff turnover cannot be over-stated. It can take anywhere between 1-2 years for a new employee to be operating at the same level of productivity as an experienced team member – there’s a great deal to learn in all organisations, and mastering a position takes time; not just for the new starter, but also for those training them. High staff turnover places great time pressures on all involved in the training process.
Value of employee retention
The value of employee retention is vast, especially for fledgling businesses in the early years of growth. People ultimately buy from people, and in today’s ever-changing marketplace, there is reassurance and comfort to be found in a long-standing, stable team that has worked closely together for a prolonged period of time.
Strong employee retention allows teams to really grow and thrive together. It allows bonds to be forged, skills to be collaboratively developed, and customer relationships to be nurtured. Simply put, the cost of high staff turnover is high: CFOs believe lost productivity, new hire training and recruiting and the most costly consequences of employee turnover.
Factors affecting employee retention
Employees move on for a number of reasons – however, more than 60 per cent of employee turnover is voluntary. This means that there are a number of steps that businesses can take to guard against this very real risk to their growth.
Regular informal check-ins and more formal appraisals with staff, investing in training and development programmes, clearly defined career paths, and flexibility towards working patterns and work-life balance are all positive ways in which companies can build loyalty amongst staff and nurture retention.
Ultimately, staff need to feel motivated. They need to know that the work they do matters, and that they are making a difference – this is particularly true amongst the increasingly-influential Millennial workforce.
Motivation, however, can be openly encouraged by providing regular positive feedback, giving staff autonomy to fully ‘own’ tasks and responsibilities, and to work in a way that suits individuals’ personality types and lifestyle.
The businesses with strongest staff retention are the ones that understand that it is now top talent that is in the driving seat, and that acknowledge that loyalty works both ways.
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