Your human resources managers and recruiters searched high and low for them. Your company trained them and likely bought software, hardware and other tools for them. But now, they’re giving notice and they’re leaving. Losing employees, especially the superstars, can be demoralizing and expensive.
The key to avoiding that costly and time-consuming issue is employee recognition. If you thank them, your company will retain workers longer. In this article, you’ll learn the importance keeping turnover low. You’ll also learn how to combat high employee turnover with an employee retention strategy.
Turnover epidemic
Many companies lose an average of 23% of their new employees within their first year, according to an Allied Workforce Mobility survey about on-boarding and retention.
A Willis Tower Watson workplace study discovered that 33% of new hires will leave their job within two years. As a result, companies face constant pressure to find replacements quickly, and absorb the high costs of new-hire onboarding.
With so many new employees jumping ship, and talented superstars lured away, it’s very important that companies are proactive about handling the turnover epidemic.
If you thank them, your company will retain workers longer.
Efforts to keep your best employees and prevent turnover should begin with employee recognition. After all, employee dissatisfaction with some aspect of their current workplace is really why employees leave.
Steep turnover cost
Depending on your company’s size, employee turnover may be costing you hundreds of thousands of dollars a year. If you don’t know how much you’re losing to turnover, try this handy calculator to determine your company’s turnover costs.
The Employee Benefit News reported that it costs an employer 33% of a worker’s annual salary to find and hire a replacement. That means that in terms of pure dollars, the replacement cost for an employee earning a salary of about $45,000 a year is $15,000. If you lose 10 employees per year, that’s $150,000!
However, 75% of the reasons employees give for leaving were related to easily solvable problems, a 2017 Work Institute report on workplace retention found.
More costs are associated with employee turnover than just the dollar amounts. The less obvious costs like knowledge gaps and the overtime of other employees filling in, add stress to a company’s bottom line.
The many hours spent finding replacements and training new hires also constitute indirect costs hurting companies with steep turnover rates. A solid employee retention strategy minimizes those costs.
Why employees leave
In many exit interviews, the top reasons employees give for leaving include:
- lack of career development
- work/life balance
- manager behavior
- compensation and benefits
- overall well-being.
A year-end Forbes study on employee recognition found that the biggest reason (36%) employees give for leaving their jobs was the lack of employee recognition. Meaning, nearly 4 out of 10 employees could’ve been saved with a “thank you”.
An estimated 42 million employees, 1 in 4, would leave their positions in 2018, marking an alarming trend followed by the 2018 Work Institute report on national employee retention. The report added that more than three-fourths (77%) of that turnover was preventable.
Keeping good employees is easier than recruiting, training and hiring new ones every year. The simple solution is employee recognition.
Employee recognition strategies
The first step in keeping great employees involves welcoming them with a great onboarding process. SHRM reports that “69% of employees are more likely to stay on with a company for three years” if they experience great onboarding.
The key to an employee retention strategy is an employee recognition strategy that’s effective and efficient. It must include:
- Frequency
- Immediacy
- Personal touch
- Peer-to-peer components
For an example of a program that includes all of these elements (along with a few surprises), visit MyEmployees.com
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