Employee retention is a big issue in the workforce. It’s not just about keeping your employees happy, it’s about retaining your talent and ensuring you keep the best people with you as long as possible.
One-third of new employees quit after about six (6) months, according to statistics. This is a significant number and one that needs to be addressed with some urgency if employers want to fix this problem in their company.
Each month in the US, 3 to 4.5 million employees quit their job according to the Job Openings and Labor Turnover Survey (JOLTS). One survey found 94% would stay at their current employer if they invested in their long term learning.
Statistics show that employee turnover has been rising in recent years. Employers are not only losing valuable talent but also having to deal with hiring, training, and replacing lost workers.
What is employee retention?
An organization’s ability to keep its employees refers to employee retention. The retention rate of employees can be expressed by a simple statistic. Employee retention, however, is frequently regarded as the effort employers make to keep their employees.
Why employee retention is important
Low employee retention can be particularly costly and detrimental to businesses in industries where specialised skills are essential, such as information technology, hospitality, and manufacturing.
Think about it when an employee leaves a company, it takes a considerable chunk of time to deal with their departure. In fact, entry-level employees typically cost 50% of their salary to replace.
Employee retention also helps boost morale, reduces costs, maintains a good customer experience, and reduces overall costs.
The best way to retain employees is by making them feel valued and providing them the opportunity for growth within your organization. When an employee does not feel valued at work, 76% look for another job opportunity
A workplace survey report found that 94% of surveyed employees responded that if a company invested in helping them learn, they would stay longer.
This can be done through training programs or mentoring opportunities that will help develop skillsets in new areas.
It’s important to make sure you are offering these types of opportunities so they feel like they have something to look forward to. If not, then there may come a point where they leave because they don’t see any future for themselves at your business.
There are various types of staff turnover. Voluntary turnover happens when an individual leaves their job for personal reasons. On the other hand, involuntary turnover occurs when a company decides for an individual to leave employment.
Retirement turnover signifies the conclusion of an individual’s working life, while transfer turnover involves changing employment by moving to another department within the same organization. Each type of turnover reflects distinct factors influencing the employment transition.
It costs an employer an average of 33% of an employee’s yearly salary for their exit.
The cost of replacing employees is high. So, before making rigorous decisions employers should screen and assess with the help of the right tools on their current roles and responsibilities.
On the other hand, the process of finding the best talent typically involves advertising job postings, recruitment agencies, screening, interviews, and hiring.
This adds up to spending a lot of time, money, and energy to replace workers that could have been retained with a good employee retention strategy.
Statistics on employee retention
In the 2021 Bureau of Labor Statistics report, the overall turnover rate is 57.3 %, but that number drops to 25% when considering only voluntary turnover, 29% when considering involuntary turnover, and just 3% when looking at only high-performers.
One report suggests that a turnover rate of close to 19% can be expected in many industries. SHRM estimates that the average cost-per-hire for a new employee is $4129.
Economic News Releases from the Bureau of Labor Statistics report that employees earning wages and salaries averaged 4.6 years with their current employer.
A person changes careers on average when they are 39 years old. Over the next five years, 87% of respondents surveyed by Kronos consider improved employee retention a high or critical priority. An analysis of 34,000 responses to the Work Institute’s 2017 Retention Report found that 75% of the reasons for employee turnover can be prevented.
The most common reason employees leave their jobs is because they are not being challenged at work. This includes feeling under-appreciated and bored with what you do every day. If this sounds familiar, it may help if you think about how an employee’s job fits into a bigger picture or strategy.
You could also consider allowing employees to change roles within your company so they have more opportunty for growth, the chance to learn new skills and grow professionally.
There is a 16% decrease in retention rates for employees who aren’t comfortable giving upward feedback.
This was an interesting statistic found in the Tinypulse retention report. This makes it clear that managers and employees must communicate clearly in order to understand the needs and make improvements.
Regularly communicating employee thoughts to management should be strongly encouraged. It shows your employees that they are valued if you keep lines of communication open.
Regular and honest communication enhances employee retention by showing employees that their contribution is valued. As a leader, it also helps you recognize when adjustments may be needed in your employee retention strategy.
