Many organisations believe that the main priority regarding their hiring strategy is finding the right people for the vacancies they have. However, this is where a lot of companies go wrong! The main priority for your business (regarding staff) should be retention. It’s crucial that you retain the staff you hire and not lose them to other companies. Obviously, finding the best people is key, but retention comes first.
A small level of staff turnover is fine and can sometimes be good for a business – allowing the introduction of fresh ideas and approaches. However, you need to understand that without a strategy in place to retain the high performers, you are in danger of losing them. Statistics state that a lost employee is said to cost a company anywhere between 30-400% of the employee’s annual salary.
Why is it so costly to lose an employee?
Firstly, you need to look at the actual financial cost of the member of staff’s workload. If it’s a sales role, think that you’re in danger of losing all the employee’s figures. Imagine if it’s your biggest earner, can you afford to lose that?
It’s not just that, think about the rest of the staff, as the team’s morale will take a blow. If your team sees one of the best performers walking away from the company, people will talk! You then have the potential problem of others following them out of the door.
Finding the best candidates is an investment, and it needs to be thought about that way. Once you or your recruitment agency has found the ideal person for the job – it’s then down to you to make sure they stay.
Imagine the situation like a bucket of water. If your bucket had a hole in it, would you keep pouring more water in to keep it topped up? Or, would you spend the time fixing the hole, so that you didn’t lose any more water? Maximising staff retention is a must – it doesn’t matter the quality of the water you’re putting in the bucket if the hole is still there, does it?
Why do people leave their jobs?
There are certain situations where it is out of your hands that an individual chooses to leave. They could be moving away, or starting their own company etc. However, it’s the scenarios that can be prevented that you must focus on:
- Poor salaries
- Lack of benefits
- No career development opportunities
- No training available
- Issues with the management
- Poor atmosphere, struggling to get along with colleagues
- Poor work/life balance
Looking at this list, none of the reasons are particularly surprising. However, if these are the reasons that are commonly being provided, they need to be investigated and addressed.
Why are your ex-employees choosing to leave?
Sometimes in a work environment it can be a struggle to pinpoint an exact problem. You’re not always guaranteed to get the facts by asking others “Why did John leave?” This could potentially lead you down the wrong path, and no closer to a solution. So, what can you do?
Anonymous and Confidential Staff Surveys/Message Boxes
The anonymity element of this reassures respondents participating in the survey, they know that any information given will not be traced back to them. This along with the confidentiality, puts their mind at rest, so that they can give their true and honest views of where they believe the company is making mistakes.
There is no need to make ex-employees feel uncomfortable upon leaving. This is possibly your best opportunity to find out the truth, so make it a civil and frank conversation, to get the information you need. It’s not going to help your company to hear “Erm, I’m just taking a bit of time to myself”, when you know this isn’t true. Make them feel comfortable enough to talk, so that you can tackle the problem for the future.
Some organisations send out these 3-6 months after somebody has left the company. The exit interview doesn’t always go to plan. Individuals can be nervous about being honest in that situation as they’re keen on ending things amicably. Usually, they’re too scared to say what they really think, and they don’t want to jeopardise their next move. However, 6 months down the line, they’re comfortable in their new role and not face to face with anyone, so they will usually be a lot more frank.
Improving staff retention
So, you have an idea of what the problem is, you can start to fix the hole in your bucket! Below are some tried and tested methods to help improve your business and improve your staff retention rate.
- Give new employees a true and realistic view of the job and what it entails
- Install career development opportunities throughout the company
- Have regular and effective staff appraisals
- Generate a practicable means of dealing with bullying
- Ensure all staff have a good work/life balance
- Create a system for any staff to register dissatisfaction, whether this be at appraisals, during grievance proceeding and any alternative method
- Leadership training for all managers
Putting these into practice, especially those that reflect the problem you have found should turn things around and improve your retention rate. Obviously, this is not something that will change overnight, it is the first step to making things better – which your staff will appreciate.
These methods will now assist you in identifying and addressing any issues in your organisation. Once your retention rate is improved and your staff are happier, you can now focus on getting the staff you want, which will also be an easier job now that you have a happier workforce. And, if you need any help, you know where we are.