What is employee retention?
While finding good people for your company is crucial, keeping them is equally as - if not more - important. The cost of a high personnel turnover can be significant. Good employee management can mean top talent is more engaged and will stay with your organization longer.
Why is having an employee retention strategy important?
Finding a good candidate in the job market and recruiting them comes with a cost and consumes valuable time. Investing time and resources into finding talent and the recruitment process pays off more if your employee turnover stays as low as possible. Employees that stay with the company tend to be more valuable as they can go through professional development which is likely to improve employee retention, improve job satisfaction and make your team more productive. Employees are the cornerstones of your business's success - working on good connections between you and your employees and creating a good company culture will pay off.
Employee retention rates - explained
What a good employee retention rate is depends of course on your business, industry, and the economic circumstances your company is operating in. However, recruitment agencies generally advise that businesses should aim for 90% employee retention rates. A figure around the 80% mark might be more realistic though. To calculate the rate at which your business can retain employees, you divide the number of employees who have stayed with the company over a set period by the total number of employees at the start of that period, then multiplying that number by 100.
Employee retention strategies - examples
Of course, there is a number of strategies to have engaged employees and retain them. The best employee retention strategies look at the entire lifecycle of employee engagement.
- This starts with your hiring process - ensuring that people are recruited for the right positions is key in having motivated employees. Ideally, your team members have active plans to build their careers within your company.
- Next, the progression opportunities within your company are extremely important. Without any opportunities for growth and development, employees are likely to look for a new job. Progress opportunities can range from regular training to internal promotions and new opportunities.
- Of course, a competitive salary will have a positive effect on your employee motivation. Ensure your employees get regular pay reviews and perks.
- Last but not least, employee wellbeing has become an increasingly present subject. It is crucial for any business wishing to grow to create a positive work environment and ensure work-life balance. Particularly when your employees are (partly) working from home, a healthy work-life balance is more important than ever.