What is employee retention? More to the point, why is it important?
Employee retention refers to the rate at which you hold onto your employees. If you have the same employees year after year, you’re doing a good job at retaining them and keeping them at your company.
Why is this important? Well, if you keep losing employees, you will also lose money and productivity. It costs a lot to keep hiring people, not to mention the downtime experienced as new people are brought in, trained, and get to grips with all your systems. In fact, it typically takes 8 months for a newly hired employee to reach full productivity.
Imagine you hire someone, they stay with you for a year, then they leave. You’ve only had 4 months of peak productivity, and now you have to wait another 8 months for the new hire to get up to speed!
So, why do businesses lose talented employees, and how can you prevent this? The exact reasons can vary from company to company, but your issues are probably rooted in the following:
A poor employee experience
People keep leaving your business because you don’t create a great employee experience. You rarely support them, they struggle to feel engaged, and you’re not really making your company a fun place to work. As you can see here: https://www.learningbank.io/employee-journey, creating a good employee experience begins with onboarding and takes you all the way through the employee journey. You need to make people feel welcome, engaged, and appreciated. If you have a business that’s enjoyable to work for – and people actually feel like they have a purpose – then more employees are likely to stick around for longer.
Similarly, a lot of employees can leave after a few years if they see no progression in their job. Ideally, people want to move up the career ladder or get some sense of progression. Whether this means being promoted or getting a raise; they like to feel as though they’re going somewhere. If you don’t offer anything like this to loyal employees that perform brilliantly, why would they stick around? They’re more inclined to take their experience and move to a different company that offers more progression. Especially if they are qualified to undertake a better role at that company; one that you’ve not promoted them to at yours.
Terrible business morals
Sometimes, you could offer great progression and a nice employee experience, but people leave because of your business morals. Perhaps they don’t agree with the messages your business puts across or the suppliers you use. Especially if your company is often under the spotlight and in the news for negative reasons. Nobody wants to be associated with companies like this, so they are going to leave. This is yet another reason why it’s crucial to have good business morals. There will always be a cheap and easy way of doing things, but it will rarely be the morally right thing to do. Sometimes, you have to stop thinking about saving money and profiting and think about the wider impact your decisions have on your company.
Improving employee retention is critical for the success of your business. You simply can’t afford to keep hiring new people and letting talented individuals go!