The U.S. labor market hit its stride in July. In fact, the numbers beat expectations as employers added a whopping 209,000 jobs.
That was the big news. What didn’t make the headlines was the fact that more than 3 million employees in the United States quit their jobs in March alone, according to the latest available figures.
Did you know that it costs nearly 20 percent of an employee’s annual salary to replace an employee who defects? The costs of reviewing applications, processing candidates, conducting interviews, training and purchasing equipment for new hires aren’t only monetary — they also cost time and lost productivity.
Given the high cost of losing an employee, not to mention today’s low unemployment rate, retention should be a top priority for every organization. If you don’t already have a retention strategy, waiting to get around to it isn’t advisable. The first step in curbing turnover, of course, is figuring out why employees are leaving.
There are some common reasons for ship-jumping that may help determine the best retention strategy for your organization. These reasons include:
- Stagnation. Employees are often looking for career and personal growth. If they have no upward mobility at your company, they may look for it elsewhere.
- Pay. Compensation, which includes medical, dental and other benefits, needs to be competitive to attract the best talent. Likewise, good pay is needed to retain top talent.
- Workplace culture. Not surpisingly, co-workers matter to employees. If they feel ostracized or marginalized by co-workers (or management), they will be looking.
- Better opportunities. As with stagnation, employees leave when they believe the prospects are better elsewhere. This could be due to a higher-paying position or simply a job more aligned with their ambitions.
Retention strategies are not universal. It’s possible that techniques and strategies that work for some organizations will not work for yours. This means you need to analyze why your employees are leaving and strategize how to combat those reasons.
Exit interviews are a great way to analyze why employees are leaving. During exit interviews, managers ask questions to employees who are on their way out of the company. Questions should be related to the employees’ time with the company, what they enjoyed, what they disliked and what prompted their resignation.
Depending on the responses from the exit interviews, you can begin crafting a retention strategy. For instance, if a main catalyst for employee turnover is a lack of upward mobility, think about how to change that. It could mean creating new roles or, if roles already exist, making a clear guide for career pathing at the organization.
Creating a retention strategy does not need to be solely reactive. Consider creating a survey to gauge employee satisfaction with the company. Include questions about what people like and what they do not like about their job.
There is no hard and fast rule for successful employee retention. Creating a retention strategy for your organization requires you to analyze both your company and its industry.
We know that healthcare and retirement benefits are an important reason to stay with an employer. Flexible schedules, catered lunches, work-from-home days, employee wellness programs, and a greater number of paid company holidays are increasingly coming into play as a way to ensure that employees remain happy and productive, find a good work-life balance, and ultimately stay with the organization for a longer period.
Just remember: whatever environment you create from any employee’s first day on the job sets the tone for the employee’s tenure with you and immediately helps reinforce that joining your company was a smart choice. Or not.
Scott McGraw is Vice President of CCIG’s Employee Benefits division. Reach him at 720-330-7924 or email@example.com.