Recruiting and maintaining top talent is one of the most significant challenges that corporations face. Highly educated and skilled employees are often few and far between. If you are lucky enough to hire such an individual, you can be sure that you are not the only one with an eye on their career. Recruiters are constantly tempting top performers with new positions that may come with more perks or better pay. Setting your organization up for success now and in the future depends on your ability to retain the talented employees on your payroll.
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Cost of Attrition
Replacing an employee inevitably comes with a cost – the cost of recruiting and hiring a replacement as well as the cost of lost knowledge and skills. The total impact felt by the organization depends on the individual’s level of expertise and the position vacated. The estimated expense of recruiting, hiring, onboarding, and training a new employee is roughly 2.5 times the salary of that position. Higher paying positions usually require a unique skillset requiring a more exhaustive search and a longer time to hire. Hiring a new member of your c-suite with the help of an executive search agency is not a fast process.
Some positions are in such high demand that it may appear impossible to find a suitable replacement. With websites worldwide under attack, companies are scrambling to find experienced cybersecurity professionals, with few qualified applicants to fill the open positions. Should your top technical employee quit, there may not be a suitable replacement immediately in the market via traditional recruitment methods. Your total loss is not quantifiable.
Additionally, open positions have far-reaching effects on the whole organization. These “soft costs” include decreased productivity, less employee engagement from coworkers, and a change in the cultural dynamic. Without a team leader or field expert on board, the organization can struggle to perform at the same standards as before. Avoiding heavy losses requires employers to place employee retention at the forefront of daily business operations.
Pillars of a Retention Plan
The reasons why employees leave their jobs are variable and cannot all be avoided. For some employees, leaving the workforce at this time is a part of their life plan. They may exit to pursue an advanced degree or take a break to start a family.
However, for many others, the choice to leave one job for another results from circumstances arising at work. They may be dissatisfied with their current employment, title, or compensation. They may have a better offer on the table or impulsively react to a bad experience with a manager. These employees could just as easily choose to stay. However, after weighing their compensation, conditions at work, and growth opportunities against the work asked of them, they concluded that the scales were not balanced. Their employer was asking too much and not providing enough in return.
Cultural Embedding
Convincing employees to stay begins with helping them become a part of the organization starting with the onboarding process. Typically, new employees are excited about their position. They are ready to tackle problems and make a difference in the company. Weaving them into the company culture through group activities, projects, and mentoring assists them in building a social network within the organization. These social ties bind coworkers together and can make them more reluctant to leave one job and start the process over somewhere else.
Compensation
Competitive pay and incentives are one of the top causes of employee turnover, especially in high-demand markets. Ambitious individuals stuck in a job with low pay and few perks are likely to leave if a recruiter can offer them something better. Companies willing to pay their employees top dollar can hire and retain that talent by leading the market in employee compensation.
Once you hire the talent, offer incentives for them to stay. Rewards linked to tenure and tailored to address employee’s wants can give employees a reason to stay. Possibilities include linking the number of vacation hours to the number of years with the company or offering more stock options to long-term employees.
Skill Development
One of the worst reasons to lose an employee is a lack of opportunities to learn and grow. Any employee seeking to expand their knowledge and skills is one that you want to keep. These motivated individuals are usually curious and engaged in the work that they do. They are astute thinkers, and if the job you are giving them is not challenging and stimulating, they will go elsewhere to develop their talents.
Investing in the skills of your employees not only aids in retention. It can also boost productivity, innovation, and creativity. Employees learning new skills bring new possibilities and ideas to the table that can benefit your company.
Recognition
Applauding and publicly recognizing an employee’s efforts and success is a vital part of retention. Holding back praise when praise is due is counterproductive. Human beings naturally remember negative comments over the positive. To maintain a healthy balance where employees feel appreciated, the positive must outnumber the negative.
Praise means little, however, when doled out to the whole team like candy. Employees need to believe that you mean what you say – recognition should be specific and sincere. The example set by managers should be encouraged among all employees. You might consider setting up a system that allows coworkers to reward the efforts of their peers, creating a company culture where positivity reigns and workers build up and support one another.
Employee retention does not simply happen because you have a great product or a charismatic leader. Developing a plan to provide for the needs of your most valuable asset, your employees, takes time and effort. However, deliberately planning to provide for their future protects your future and establishes a culture where employees come and stay.