The biggest problem managers have with employee retention is not knowing what steps to take to improve it.
It's like being on a sinking ship and not knowing where the leak is to fix it. Managers who are losing employees left and right are stumped. And all you're looking for is an answer to the question: Why are my employees leaving?
How to Win The Game of Employee Retention
The problem of employee turnover
Losing employees is a problem. In fact, it's several problems rolled into one.
First, there's the financial aspect. One SHRM study estimates the total cost of replacing a lost employee can range from 90% to 200% of that employee's annual salary.
Every company loses a good employee once in awhile, but when it's a regular occurrence, it becomes a significant financial burden.
The financial loss includes items like PTO pay out, loss of productivity when the employee leaves, the cost of bringing in contractors to fill the gap, and also on-boarding of a new employee -- who may ask for more money.
There are also the less tangible effects -- Like the effect on morale for the remaining employees. No one likes to be the last man standing on that sinking ship. So when employees who haven't considered quitting see their work friends leaving it makes them think twice about sticking with the company.
This is why in 2015 40% of HR professionals cite employee retention/turnover as their #1 concern.
Why is it so hard to retain good employees?
The truth is, if you're paying attention it's not that hard to keep good employees happy. If it seems like an impossible mystery to solve, it could be you're looking in the wrong direction:
Don't ask, "What is it about these employees that they want to leave my company?"
Instead, try asking, "What is it about my company that it can't keep hold of employees?"
There are so many key metrics about what drives employee engagement. So much feedback from workers about what they want to feel satisfied with their job. And tons of research into employee retention and engagement.
Given that wealth of information, the next step is knowing what to do with it.
The solution to high employee turnover
Here's the good news: most employees who leave for another company don't go out in a blaze of glory (or fury) because of one bad day.
Why is that good news? Because it tells you that employees who quit have thought about it for awhile, which means there are indicators to look for and areas of possible intervention that could keep employees sticking around.
The main reasons employees leave include conditions like these:
- poor management
- bad company culture
- lack of engagement
- no prospects of career advancement
All of those items are fixable. Some take more work than others, but there are clear solutions to each issue.
I get it, some of this costs money. And most companies don't have "extra" funds laying around with nothing to do. But creating a culture employees want to stick around for is important.
Even a small company can make efforts to show employees they are being considered. And some of the fixes that need to happen can take place during an off-site team building event, which doesn't have to cost a lot of money.
In the long run, excessive employee turnover is already costing you money. So it's worth it to prioritize fixing the problem over paying for it on the other side.