Perhaps you’ve heard of the “Great Resignation.” In the wake of the COVID-19 pandemic, businesses saw a surge in the number of people choosing to leave their jobs. As recently as June 2023, the US Bureau of Labor Statistics (BLS) data suggested this is slowing down. According to the BLS, the number and rate of quits (typically voluntary) decreased to 3.7 million (a loss of 295,000) and 2.3 percent [1].
Yet employee turnover, at any rate, can challenge businesses, leaving many leaders focused onemployee retention. Read on to learn more about the pros and cons of employee turnover and strategies for retaining talent.
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What is employee retention?
Employee retention refers to your ability to keep employees satisfied and productive so that they don’t look for work elsewhere.
Decades ago, an employee might receive a job offer immediately after college at a company and stay there for the rest of their working life. Today, top talent expects to move around within their industry, perhaps even shifting their career trajectory entirely. This requires businesses to pay more attention to talent retention initiatives, encouraging employee satisfaction and morale to avoid costly turnover.
Pros and cons of employee turnover
Employee turnover refers to employees moving in and out of the labor market and needing to replace someone when a position opens. Employee turnover can be a good thing, though it is often associated with its costs. This section examines the advantages and disadvantages of employees voluntarily moving on from your organization.
Pros
Employee turnover can actually lead to a boost in company-wide performance. It can enable a company to replace its low performers with stronger talent. Plus, turnover opens the door to new hires who can offer greater diversity, fresh insights, and expertise.
Cons
Employee turnover costs your organization in several ways. Looking just at the financial implications, you could need to plan for:
Final paychecks, accrued vacation, separation pay
Increased unemployment tax
Continued benefits
Administrative costs of processing the separation
Advertising and recruiting fees
Interview expenses
Medical exams and prescription costs
Temporary and contract employee costs
Overtime
Relocation expenses and salary
Losing and replacing an employee also draws on other employees’ time. Payroll and IT departments need to work with the employee for exit interviews and technology recovery. Managers may need to establish transition plans. Colleagues could need to fill in for the leaving employee. Then, to bring in someone new, someone needs to write a job description, recruit new people, interview candidates, and work to screen, orient, and train the new employee. This can all negatively impact employee productivity in other areas.
Meanwhile, the institutional knowledge that the employee has of the company and how to do their job can be lost in the turnover, too.
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Preventing excessive turnover can help business profits and reduce resource waste. So, what can you do to hold onto your employees longer? These top strategies for retaining employees can help maintain productivity and support enhancedemployee engagement.
1. Hire well
2. Make your company a place where people want to work.
Providing people with a desirable place to work supports employee retention. When people feel valued and respected while enjoying great job conditions, solid benefits, and compensation, they are likelier to stay put.
More employees today also look for a value match. They want to feel their work is both challenging and meaningful. When people find their work fulfilling, their motivation and loyalty increase.
3. Onboard effectively
Make sure your people know what you expect of them. Give them the tools to do the job well. Introduce them to colleagues and people who can answer any questions they might have. The onboarding period also allows you to communicate company culture and clarify roles and responsibilities. Spending the time upfront to position your people for success helps counter employee frustrations and issues that can lead to turnover.
4. Provide opportunities for training and development.
Training and development help employees feel supported and envision a future at your company. Both enhance their happiness and success, making them more likely to remain loyal. Training doesn’t have to focus exclusively on professional skills. You might also offer tools to support employees’ financial wellness, mental health, and life skills. These help demonstrate you care about your people more holistically.
Read more:The Power of an Effective Employee Training Plan
5. Reward people
Providing feedback and rewarding employees for a job well done can effectively motivate your people. Workplace recognition, done right, can foster collaboration and camaraderie for a more positive work environment. Keep in mind that people enjoy receiving recognition in various ways. Personalize your efforts to ensure the person feels appreciated, not embarrassed.
6. Monitor your managers
Management has a major impact on employee satisfaction. The relationship someone has with a manager can shape their perspective of their job and your company. Being aware of your managers’ leadership styles and their effectiveness inencouraging collaborationand innovation, providing constructive feedback, and motivating their team can help you avoid turnover due to poor managerial skills.
Read more:Top Strategies to Build Employee Engagement
Required skills for retaining talent
Relationship building
Empathy
Active listening
Conflict resolution
Adaptability
Communication
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Article sources
US Bureau of Labor Statistics. “Job Openings and Labor Turnover Summary." Accessed December 3, 2023.
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