Small Business Tip of the Week: How to retain employees
Sept. 14, 2010 at 4:14 a.m.
Employees leave organizations for many reasons. often, these reasons are unknown to their employers.
Employers should listen to employees' needs and implement retention strategies to make employees feel valued and engaged in order to keep them. These retention methods can have a significant and positive impact on an organization's turnover rate and, in turn, save business capital.
Turnover is costly. It can cost almost three times an employee's salary to replace someone, which includes recruitment, severance, lost productivity and lost opportunities. Below are a few turnover facts and rates:
n More than 50 percent of people recruited to an organization will leave within two years.
n One in four of new employees will leave within six months.
n About 70 percent of organizations report having difficulties in replacing staff.
n About 50 percent of organizations experience regular problems with employee retention.
It's important to develop a retention plan to retain employees and keep turnover low.
Think of retention as re-recruiting your workforce. Recognize that what attracts a candidate to a particular job is often different from what keeps that person there.
While salary certainly is a key consideration for potential employees, pay alone won't keep them in a job. Today, employees are looking for a career package, including a career path, the possibility of having greater responsibilities, and a work-life, or quality of life, balance.
Here are some effective methods employers use to keep employees happy and part of their organization instead of looking for employment opportunities elsewhere.
nTraining - Through training, employers help employees achieve goals and ensure they have a solid understanding of their job requirements.
nMentoring - Through mentoring, an organization pairs someone with more experience with someone less experienced in a similar area, with hopes to develop more interest in learning and in their particular position.
nMake employees feel valued - Employees will go the extra mile if they feel responsible for the results of their work, have a sense of worth in their jobs, and receive recognition for their contributions. Most team members will work harder to carry out a decision they've helped to influence.
It's clear having proper retention strategies in place is one of the primary tools in order to retain employees. Employees need to feel valued and appreciated, and also receive feedback, growth opportunities and work-life balance options.
They must also trust and have confidence in their leaders.
All of these strategies are beneficial when an employer wants to keep employees within an organization and keep costs of turnover low.
Kacey Lindemann is a senior business advisor for the UHV Small Business Development Center. Contact Lindemann at lindemannk@ uhv.edu.