3 Reasons Employee Retention Matters More Than You Think (And How to Get It Right)
While hiring a great new employee is cause for celebration, welcoming a new face to the office hardly guarantees they’ll stay on board long-term. In fact, getting someone to join your company is only half the battle. The real trick is getting them to stick around.
If you’re not as focused on employee retention as you are on recruitment, well, you might just end up having to replace your top performers as they move on to greener pastures.
Need more convincing? Consider these three reasons that employee retention should move to the top of your priority list.
1. Skimping on Employee Retention Wastes Serious Resources
Yes, we’re referring to wasted time—all those hours spent reviewing resumes, coordinating interviews with hiring managers, and following up on references—but we also mean dollars and sense. Every time a company has to replace a salaried employee, it shells out between 6 and 9 months’ salary, according to SHRM. That cost includes both the salary spent on HR and other departments as they try to find the next hire and the slower productivity and output that a new hire will bring to the role.
Keep in mind that no one steps into a job on day one and performs at their absolute best: Every new face at the office needs training, extra attention, and feedback before they’re running at full speed (and all of that adds up!).
2. Your Rock Stars Won’t Stick Around Without Support
Even if you have the budget and resources to spend on hiring (and rehiring) for key roles, we’re guessing you still want your top-tier talent to stay put. But here’s the thing: Employees who don’t feel appreciated and connected at work are more likely to make a move when recruiters come calling. And when the labor market is really tight—like when unemployment is less than 4 percent!—rock star talent starts fielding offers on all fronts.
Employees who aren’t actively searching for a new job are also prime candidates for passive recruitment—where recruiters and hiring managers use LinkedIn and industry groups to find top performers that might be open to a great offer from a new company. Without employee retention efforts in place, you’re giving your best talent little reason to turn down those offers and log another year (or more!) at your company.
3. Turnover is Contagious
Let’s be real: It can be unsettling when you start a new gig and almost every other person in the office has been there for a short period of time. It signals to new hires that employees might not stick around for long—whether due to a bad company culture or a lack of growth opportunities—and maybe they shouldn’t settle in for the long haul, either.
On the other hand, when a new hire is welcomed on board by employees who have spent years on the job—and are still singing the company’s praises—that can give new hires an incredible confidence boost that they made the right decision in accepting the job and can make themselves at home. But the only way to prevent a short-tenure culture (or turn the tide, if you’re already stuck with one) is to focus on long-term retention efforts across the entire organization.
It’s a simple concept: Happy people don’t leave their jobs. But making employees happy is about way more than adding ping pong tables to the breakroom and plastering the walls with motivational posters. Effective employee retention requires a comprehensive plan that fosters engagement, creates an authentic company culture, and speaks to the values that employees truly care about (hint: more flexibility, less free swag). Most importantly, that plan needs to start from day one and continue throughout their career at your company.