For a business to thrive, finding and retaining the best employees is a crucial component. Creating a retention strategy for your organization can save big money. It can cost 33% of an employee's annual salary to replace a current employee. Some studies (such as SHRM) predict that every time a business replaces a salaried employee, it costs 6 to 9 months' salary. For example, a CAP study found average costs to replace an employee are:
16 percent of annual salary for high-turnover, low-paying jobs (earning under $30,000 a year). For example, the cost to replace a $10/hour retail employee would be $3,328.
20 percent of annual salary for midrange positions (earning $30,000 to $50,000 a year). For example, the cost to replace a $40k manager would be $8,000.
How can you keep your employees?
There are many studies on best practices for employee retention. Here are a few proven strategies:
Feedback:
Create ways for employees to provide feedback about the work environment: Assuming employees are happy is risky. Positive morale is the backbone of a thriving organization. High morale can increase productivity, creativity, safety, and overall satisfaction.
Recognition:
In a study by Bersin & Associates, organizations with recognition programs that were highly effective at improving employee engagement had 31% lower voluntary turnover than those with ineffective recognition programs. As it stands, 66% of workers are likely to leave their job if they feel unappreciated.
Benefits:
Benefits are crucial for employee retention. Employees want benefits that fit their personal needs.
Purpose:
Make sure your employees know how their work matters in the company. The purpose is essential, and 57% of younger Americans said that they wanted to be part of something that was enjoyable or made a difference in society.
Summary
Understanding the high cost of losing an employee makes retaining quality employees a top priority for successful organizations. There is not an easy "one-step fits all" for employee retention, so contact Superior Benefit Specialists for more information to help you design a strategy that fits your individual, organizational needs.
Posted on Jan 6th, 2020