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Five Benefits to Retaining Your Employees
Customer retention is important to any business, but keeping employees is just as essential. While it is easy to focus on retaining customers and overlook the importance of retaining employees, without them, it would be impossible to acquire new long-term customers.
Employees leave for all sorts of reasons: They may wish to relocate, or their spouse may be transferred to a different location. They may no longer be happy in their job. Some just simply decide they no longer wish to work at all anymore, or retire. Whatever the reason, driving employee retention should be a focus for organisations to create positive outcomes. These could include improving the working environment or implementing staff development plans; actions like these trickle down to productive work resulting in a great experience for your customers. Generally, an individual will stay with a company if the pay, working conditions, company culture and developmental opportunities are equal to or greater than other contributions required such as time and effort.
Here are our top 5 benefits of focusing on employee retention you can start taking advantage of today;
1. Reduce Turnover Hassle
Employee turnover is a normal aspect of any job, but constantly having employees coming and going can be a huge strain on the HR team. Anyone from the HR team will know the hassle and time-consuming task of finding a new qualified and reliable employee. Once that person has finally been found, then comes the onboarding process. As a result of all these hours of work and preparation, finding and hiring a new employee will take up more of your time and money than putting into place procedures that would allow you to retain an existing employee.
While each of these aspects is essential to replacing previous employees, there is an easier way to prevent this occurring more often than wanted. Focus on employee retention – upfront – and help reduce the hassle and wasted time. In addition to hiring for the skills your company needs, focus on culture and team fit. This might seem like an obvious step, but you'd be surprised how few companies take it.
The table below shows the average percentage of turnover in NZ in 2019 per industry:
|Turnover Rate – 2019
|General, Other Services
2. Improve Culture
Morale is so important within any company and organisation. Employees who are constantly watching their coworkers and colleagues leave can create an unproductive work environment. It is important to create a space where everyone feels confident and supported to perform at their very best. Positive company morale will lead to top talent being attracted and retained. An organization's overall morale will make or break them. With positive morale you will create a productive work environment and a loyal employee base.
Be transparent and communicate with your employees often. Your employees will respect you more when you inform them about changes within the company as well as sharing positive or even constructive feedback, allowing them to consistently improve and help to better themselves as well as the company. A Harvard Business Review found that 57% of employees asked, prefer constructive, developmental feedback over praise and recognition.
Keeping your valued employees happy will also help you to recruit new employees in the future. Employees who are happy at work are more likely to promote working with an employer because they love where they work and will want to share that passion with others. In fact, referrals are one of the top sources of new-hire volume and quality.
3. Increase Overall Productivity
Typically, it can take 8 months to a year for a new employee to match the productivity of the individual they replaced. Although some employee turnover is expected, as stated above, being able to reduce that overall number saves a lot of lost productivity for the remaining employees, especially the teams that will deal with these transitions.
The more employees feel that their management team trusts and supports them, the more motivated they are to produce excellent outcomes.
4. Better Customer Experience
We have established by now that the main aspect of retaining your employees is their happiness with their job. Having happy and engaged employees trickles down to your customers. They will provide a better experience and go the extra mile, ensuring the company keeps its good reputation. Sending a leaving survey to your departing employees will help you uncover what makes them leave. As a result, you will be able to engage your customers and clients, retain your existing employees, and help ensure that your business thrives.
5. Reduce Costs
As we’ve mentioned before, turnover can be expensive. The constant movement of employees may result in significant costs associated with:
- A severance package or other exit package.
- Recruiting and acquiring talent.
- Hours spent on resume analysis and interviews.
- Hours spent on onboarding and training.
- Lost productivity.
- More frequent (and costly) mistakes.
- Lost revenue as a result of a downgraded customer experience.
A CAP Study found that in the US, depending on the positions you are looking to hire, turnover costs can be unfortunately high. Low-paying and often the most common turnover roles can cost about 16% of the employees annual salary. This then jumps to 20% for mid-range positions and then significantly increases to over 213% for high-level executives. Being able to reduce employee turnover will save your company time as well as money.
How can you start implementing these changes?
Understanding your employees is one of the first steps to enhancing employee retention. How will you improve an employee’s experience if you don’t know what you need to improve? A good way to understand your employees and find out what it is that keeps them from leaving (or pushes them away) is to conduct employee surveys. Ideally, your survey program will include a regular cadence of surveys to existing employees to measure the impact of improvements, as well as comprehensive exit surveys to capture the reasons employees choose to leave.
Touchpoint Group helps you set up and analyse large volumes of employee survey data to identify the issues they are experiencing automatically, so you can get a complete view of your employee satisfaction data. With this information, you can learn what restrictions, frustrations, and limitations employees as well as customers are experiencing and define a course of action. Contact us to learn more about our Employee Retention Solution.
Harvard Business Review
Contact us to learn more about our Employee Retention Solution.