The importance of retaining talent (and how to achieve it)
According to ACAS, the leading body for the promotion of strong working relations between employers and employees in the UK, the average cost of replacing an employee equates to a shocking £30,000.
Why so much?
ACAS suggests that ‘more than £25,000, comes from loss of productivity caused by the time it takes — 28 weeks on average — for a new recruit to get up to speed.’
This means that if you replace one employee every quarter, then the cost of replacement can skyrocket to £120,000 in just 12 months.
So, with the costs of replacing lost staff so high, how can employers work harder to retain their best talent?
Conduct employee satisfaction surveys and exit interviews
Second-guessing why your staff are leaving your company for pastures new isn’t going to help you fix any internal problems that might be the cause of your staff turnover. By listening to your employees to find out how happy they are in their jobs, and more importantly, what they really want, will help bolster your retention efforts.
Employee satisfaction surveys will help you to discover:
- The current vibe of the business and what sort of workplace culture has been cultivated within your company
- Whether or not your company objectives are being met
- Underlying issues or concerns around job security, company stability, and ethics
- How employees feel about the pay and benefits compared to similar jobs in the market
- How employees feel about the balance between their work and personal lives
Exit interviews are equally as valuable. Although conducting exit interviews may feel a bit like locking the stable door after the horse has bolted, there are many lessons can be learned from them.
Exit interviews will help you to understand:
- Why an employee is really leaving and if there is anything you can do to prevent it next time
- Where there might be opportunities for staff development
- If there are any underlying toxicity issues in your company’s culture or management structure
Understand that money is only part of the story
There is a common misconception that the majority of people seek employment elsewhere because they want more money. Although this is still true to an extent, the workplace is changing. As one generation gives way to the next and the 9-5 is becoming an outdated view of the working world, more and more of us are demanding flexibility and the opportunity to do more meaningful work.
That said, traditional pay and benefits are, of course, still held in high regard.
According to a recent Gallup Poll, 25% of surveyed respondents sought alternative employment because they wanted better pay. However, 14% sought work elsewhere because they wanted to work with an organisation that better aligned with their personal values.
In the same survey, 27% of respondents said that the opportunity to do more meaningful work was the main thing that attracted them to their new employer.
The modern working world wakes up and places more importance on social, political and environmental matters. Therefore, is it time that your business analysed how to offer more fulfillment and meaning to the work of its employees?
More often than not, mistakes in the search, selection and recruitment process can lead to higher levels of staff turnover. According to one report, 80% of employee turnover is due to bad hiring decisions. And, according to another, almost 20% of resignations happen within the first 45 days, with an estimated $37 billion spent annually to keep unproductive employees who don’t understand their job.
These staggering figures could be significantly reduced with better and more appropriate recruitment strategies, or by outsourcing your recruitment needs to an experienced and professional recruitment partner.
Learn from the masters of industry and adopt a copycat approach
If you’re wondering where to even start when it comes to retaining your top talent, learning from the big boys and girls in your industry is an excellent first step. Find out what’s happening in your sector and what quick wins, together with longer-term strategies you can deploy to strengthen your talent retention approach.
For example, did you know that IBM offers its employees personalised development and training plans? Bosch’s 390,000 employees have the opportunity to work across different functional areas, industries, meaning that they can change roles without changing employers. Ericsson, on the other hand, places employee wellbeing at the top of its employee retention strategy. And, Schneider Electric offers early-career employees the opportunity to exchange ideas with senior leaders.
Learning from those that have been and gone before you is a bit like learning to bake from your grandmother. Some of the best ideas are already being deployed in some of the world’s top companies; ideas that could be easily adopted into your own business and workplace culture.
Strengthening your employee retention strategies, or even putting them in place for the first time, can be daunting and time-consuming but it needn’t be costly. And, you can guarantee that your business will be financially better off, with a happier and healthy workforce.