Over time, the percentage of employees who stay with a company can be determined by their retention rate. The more stable and pleased your employees are, the higher your retention rate.
For nearly a decade, the number of employees leaving the company has been increasing.
Employee resignations, terminations, and layoffs all fall under the umbrella of “turnover”. This trend suggests that the labor market is healthy and that the unemployment rate is low. Furthermore, it stresses the fact that a large portion of this turnover can be avoided.
- Why are retention rates important for small firms?
- Strategies for improving retention
Why are retention rates important for small firms?
Retention has a significant impact on your company’s financial and competitive performance.
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Operating costs:
Time and money invested on recruiting and onboarding a new employee are lost when they depart the company. All of these costs must be incurred again if you bring in a new employee. For these reasons, the Work Institute estimates that companies lose $15,000 each worker.
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Productivity:
Each time you take a vacation, your productivity falls. You will be without a worker for the duration of the hiring procedure. And it takes time for a new member of the team to adapt to their new surroundings.
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Employee engagement:
Workplace morale suffers when employees leave, which in turn has a negative effect on production. Seeing coworkers be fired or move on to better opportunities can be upsetting. Remaining members must frequently scramble to preserve order until a replacement is found.
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Customer service:
In order to build long-term relationships with customers, you need a team of experienced and dedicated employees. You have a problem if your consumers are dealing with a different representative every two months.
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Growth:
When an opportunity presents itself, you are unable to take full advantage of it because of this unseen drag on earnings and outputs.
Strategies for improving retention
Your bosses aren’t the only ones to blame for your staff quitting. This may be true, however your company’s retention rate is influenced by a variety of other factors. You can try to improve your retention rate if it’s lower than you’d want:
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Find opportunities
The first step is to figure out why individuals are leaving your company. Workers tend to depart for the following reasons:
- The lack of advancement in one’s career
- Maintaining a good work-life balance
- Managerial conduct
- Benefits and compensation
- Optimum health
Conducting exit interviews, meeting with departing team members, and chatting with management can help you establish if these trends apply to your firm. Formal questionnaires can also be used to gather data on the reasons for leaving staff. Additionally, reviews on Glassdoor might help you learn more about how your employees feel about working at your company.
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Knowing your strength
Retention isn’t only about keeping on top of those who are leaving. As also, it’s about the people who are still here. Current employees’ levels of satisfaction with their work can be gleaned from surveys and one-on-one interviews. You should look for departments that have a high degree of coherence and happiness. Do these regions have any lessons that can be applied elsewhere?
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Customize company solutions
You may customise company solutions based on your personnel study. The following are a few examples:
- Creating career paths and growth plans for employees.
- The provision of learning opportunities and the advancement of expertise.
- Taking into account new incentives, such as financial aid for tuition.
- Allowing employees to work from home or on their own schedules, among other work-life balance benefits.
- Aiming to increase employee growth, communication, team building and conflict management by training managers when necessary.
- Keeping tabs on the perks and salaries of your employees
- Daily and in each team, living up to your company’s basic values