The recruitment landscape has been through a lot in the past few years. We’ve seen rapid employment shifts throughout the pandemic and we’re in the thick of the resulting Great Resignation. According to one survey, 25% of workers are at a moderate to high risk of leaving their jobs in 2022.There are many benefits to focusing on #EmployeeRetention, like saving money and increasing productivity. And with 25% of workers at risk of quitting, retention is more important than ever:
What would happen if 25% of your workforce decided to leave your company? Chances are, your organization would be in trouble. That means that prioritizing employee retention in 2022 is essential. In today’s post, we’ll take a look at nine of the numerous benefits that come from putting employee retention first.
What Is Employee Retention?
Employee retention refers to how well companies can keep their employees on board. Low turnover and a high retention rate indicate that companies are supporting their employees. It also points to higher employee engagement, job satisfaction, and morale overall. On the other hand, high turnover and low retention suggest engagement and morale that could use a boost.
The Facts: Employee Turnover in 2021
1. Cost Savings
One thing is for certain: employee retention saves time and money. It can cost as much as $20,000 to replace an employee with a salary of $60,000. Even hourly employees are expensive to replace, with costs as high as $3,500. In addition to the costs, filling open positions takes many hours of work for recruiters, HR professionals, and hiring managers and can take anywhere from 33 to 49 days on average.
2. Increased Employee Engagement
Employee engagement and retention go hand in hand. When employees are highly engaged in their work, they are 87% less likely to leave. Engaged employees are motivated, loyal, and connected to both their own and the company’s goals.
According to Gallup, there are five main drivers of engagement:
- Caring managers
- Focusing on strengths
- Ongoing conversations
Employee engagement software makes it easy to measure and boost engagement with several tools:
- Employee surveys to gauge overall sentiment
- Expert-built employee review templates for effective, fair review cycles
- Employee recognition tools to acknowledge milestones and celebrate achievements
- Goal-setting tools to stay on track and share goal progress
3. Excellent Employee Experience
When companies focus on employee retention, they give employees the support and benefits they need for an excellent employee experience. Retain top talent by paying attention to what today’s job seekers say they’re looking for as they search:
- Competitive pay
- Professional development opportunity and skills training
- Supportive, engaging work environment
- Employee well-being
4. Shows Recruitment and Onboarding are Effective
Good news: high retention rates show that recruitment and onboarding strategies are working! Retaining employees can have a positive effect on recruitment —longer tenure is a positive indicator of company culture and work environment to potential employees. 71% of employees have used a referral to learn about job opportunities, meaning your engaged workers are an excellent candidate source. Referrals also tend to become longtime employees themselves: 45% of referrals stay with a company for at least four years.
A new hire onboarding program is also a huge contributor to retention —it can boost retention by as much as 82% when done well. Take note of retention rates for new hires in every role to ensure onboarding is successful across every department.
5. More Productive Teams and Employees
If your employees stay at your company long-term, it’s likely that you’ll see increased productivity across the organization. This is because fewer new hires are going through the onboarding process and ramping into their roles. In addition, there’s less lost productivity for hiring managers and teams as a new employee adjusts. Instead, your employees are completing projects and learning new skills.Are you focusing on #EmployeeRetention in 2022? If you’re on the fence, check out these 9 top benefits of retaining employees from @ClearCompany:
6. Experienced, Knowledgeable Employees
Another important benefit of employee retention is experienced, knowledgeable employees. As employees spend more time at your organization —whether in one role or several —they gain useful knowledge and a deeper understanding of the business. Longer tenure also means that employees establish relationships with their colleagues and clients that are hard to replace.
7. Great Company Culture
It’s no question that retention benefits company culture as a whole. When employee turnover is high, it affects morale negatively across the organization. In contrast, when many employees have been at the company for several years, newer team members can feel confident that your company is committed to retaining its talent.
8. Better Customer Experience
Longtime employees, with their depth of knowledge and longstanding client relationships, lead to a better customer experience. Compared with new employees who may lack context, make more mistakes, and need more support, years-long workers have an advantage when helping customers. Satisfied customers tend to be repeat customers, and there’s evidence that shows reduced retention leads.
9. Enhanced Business Performance
When employee retention is high, employees get to focus on their work rather than hiring, onboarding, or helping new team members settle into their roles. The productivity from the experienced, knowledgeable employees we mentioned, lower hiring costs, and happier customers result in increased profits. Higher retention gives human resources the ability to spend time on strategic work, like process improvement, employee data analysis, and succession planning.
While recruiting and onboarding are always top of mind, the importance of employee retention shouldn't be underestimated. Your current employees are your company’s most valuable asset. In a competitive job market where employees have options, your company must focus on cultivating an engaged, motivated workforce to retain top employee talent.
A complete Talent Management solution like ClearCompany can play an integral role in your employee retention strategy with tools for support at every stage of the employee lifecycle. Manage employee referral programs, onboard seamlessly, measure and foster employee engagement, give effective feedback, and set aligned goals with ClearCompany’s Talent Management Suite. Try it out at your organization —get started with a free demo from the ClearCompany experts.