- Everyone in an organization plays a key role in employee retention.
- It is more expensive to hire new employees than it is to retain existing ones.
- Employee retention is directly related to employee satisfaction.
Smart employers know that retaining their top talent means making them feel valued and giving them opportunities to advance. You may think you're doing a pretty good job of this, but research has found that your message may not be getting through to your employees.
According to an Employee Development Survey by talent management solutions provider Saba Software and WorkplaceTrends.com, 60% of U.S. and U.K. human resources leaders said they believe their companies provide employees with a clear career advancement path. Workers, on the other hand, felt differently: Just 36% agreed that their companies provide an advancement path. Moreover, one-third of those surveyed felt their skills and talents were not being recognized in the workplace, and 41% said they would leave their current company for a better opportunity.
Employee retention is the ability of a company to keep the employees it has. A retention rate is usually stated as a percentage, so a company may have a 90% retention rate, for example. Turnover, or when companies lose employees, costs businesses a lot of money. Employee retention is the way to fight turnover.
What steps do you need to take to develop an employee?
When you want to develop employees, you must show that you trust and respect them. When you give them responsibility, you are showing them that you trust them and are giving them an opportunity to grow. Employees want to feel satisfied at work and know that they have room to advance in the company. Encourage your employees to gain new skills, and provide training and programs to help them do that. Give your employees a place to talk and be heard. Everyone wants to be treated with respect. When you treat your employees with respect, they return the respect and loyalty to your company.
But employee retention isn't just the responsibility of upper management; everyone in an organization is responsible for retaining employees. The overall culture of a company affects every single person within that company, and it's the driving force behind how people are treated. Leaders and management directly interact with employees and can gain an understanding of what employees want from the company. They can listen and make changes that affect the employee directly. For larger-scale changes, human resources staff can listen to the feedback and add incentives for employees to help retain employees.
So, where is the disconnect between HR and employees? It all comes down to communication. The research found that HR leaders want to know what inspires and motivates their workers, and more than 30% of employees would be happy to share this information. But HR doesn't seem to be asking the staff the right questions to find out, said Adrienne Whitten, vice president of product marketing at Saba at the time of the study. [Read related article: 12 Secrets to Keeping Employees Happy Without a Raise]
"When we asked HR folks what data they would most like to have on their employees, the No. 1 cited answer was 'what motivates them,'" Whitten told Business News Daily. "This shows that employers are still struggling with the employee engagement challenge. [In other words], how do you create some kind of loyalty to the company when companies can no longer offer the promise of stability and lifetime employment?"
"Companies need to survey their employees to understand their needs so that they can better serve each one individually and as a group," added Dan Schawbel, founder of WorkplaceTrends.
Whitten and Schawbel said that employers can start gaining the workforce insights they need – and thus, encourage retention – by asking employees the following questions:
- What motivates you and keeps you coming to work every day?
- What do you love about your job?
- What are your personal development goals in your current position?
- What type of career support will be most beneficial to you?
- What type of skills do you feel like you're currently lacking?
- How do you learn best, and what's the best vehicle we should use to support your development?
- What are your personal goals and values?
The mistake most HR departments make is assuming that all managers are having these types of conversations with their employees, Whitten said. But these questions can be tricky to ask, and managers need to be prepared to address the resulting answers.
"If an employee tells you that their personal goal is to have more time to attend their children's events, the manager needs to be prepared with whether they can offer flex time and what the company policies are," Whitten said. "This is where HR can help by partnering more closely with the managers."
While there are many other things employers can and should do to build workforce loyalty – such as offering flexible work options and other great benefits – just initiating conversations about what's important to an employee's personal and professional life is an excellent start.
"We all know the old adage that everyone is replaceable," Whitten said. "Sometimes, simply communicating to your employees that they have individual value to the company will go a long way towards engaging them and instilling loyalty."
How much does it cost to develop an employee versus hiring a new one?
While the exact cost of keeping an existing employee versus hiring a new one varies among industries, data indicates that hiring a new employee is more expensive than retaining an existing one. According to the Society for Human Resources Management, the average cost per hire is $4,129.
The Saba/WorkplaceTrends Employee Development Survey polled 2,000 U.S. and U.K. employees and HR professionals.