Re: @Inc Article On Employee Retention
Marcelo Eichel
Communication is more important than ever these days. With more remote employees feeling isolated, additional communication is critical to help employees feel valued, connected and better about themselves. Yet, 42% of employees shared they were uncomfortable talking about mental health with their manager.
It is important for employees to clearly understand the mission, goals and values of the company and how each employee is contributing to those. Leaders should also encourage open door policies and safe spaces so employees can feel more comfortable discussing their mental health.
A 2021 survey from Great Place to Work found that employee recognition was most important to 37% of employees and would encourage them to produce better work more often. In addition to recognizing employees who go above and beyond, companies should also acknowledge birthdays, anniversaries, births, etc. Personal recognition helps employees feel more valued, motivated and productive. To be successful, make sure recognition is specific, timely and aligned with company values.
Employee turnover occurs when an employee leaves your organization. This can be for any reason, including quitting for better opportunities, retirement, or termination. An employee turnover rate accounts for the number of employees who leave your organization in a specific period.
Employee turnover can be split into two categories: voluntary and involuntary turnover. Voluntary turnover is when an employee chooses to leave the organization, while involuntary turnover is when you terminate an employee.
According to the Bureau of Labor Statistics1, the number of U.S. employees voluntarily leaving their jobs has increased since 2021 in a trend known as the Great Resignation. This is especially evident in industries like professional and business services, manufacturing, and retail.
One of the first changes you'll notice after losing an employee is a decrease in employee morale. As more employees leave, the ones remaining may have lost a valuable work friend, which matters more than you might think.
According to a study by Office Vibe2, 70% of employees say having a friend at work is the most crucial element to a happy work life. Moreover, 50% of employees with a best friend at work reported feeling a stronger connection to their organization.
Losing employees also leads to decreased productivity simply because you have fewer team members to get work done. As the remaining employees get overwhelmed with more work to help make up the difference, their stress levels rise, making them far less likely to perform at their best.
This kind of hit on your employees' productivity is also a hit to your organization financially. A HubSpot report3 found that lost productivity costs U.S. businesses a shocking $1.8 trillion every year.
Perhaps the biggest concern employee turnover presents is the financial costs of recruiting and training new employees to replace the ones you've lost. While the exact cost of turnover varies, there's no question it's something employers need to manage.
Some studies4 predict that every time a business replaces a salaried employee, it costs 6 to 9 months' salary on average. For an employee making $60,000 a year, that's $30,000 to $45,000 in recruiting and training expenses. However, turnover varies by wage and role of the employee.
One of the reasons the real cost of employee turnover is such a mystery is that most organizations don't have systems in place to track exit costs, including recruiting, interviewing, hiring, orientation and training, lost productivity, potential customer dissatisfaction, reduced or lost business, administrative costs, and lost expertise. Calculating this amongst all employees for a total annual cost takes collaboration among departments (HR, finance, operations, etc.), tools to measure these costs, and reporting mechanisms.
According to our 2022 Employee Benefits Survey Report, 87% of employees surveyed said they value health benefits like health insurance. Additionally, 72% of employees value dental insurance, and 63% value mental health benefits.
Traditional group health insurance is an excellent option for many organizations, but rising insurance costs are making it unaffordable for many small to midsize organizations. Additionally, employees are forced into networks that may not work for their individual needs.
A health reimbursement arrangement (HRA) is a popular option among organizations for its flexibility and lower costs. An HRA allows you to reimburse your employees tax-free for their qualifying medical expenses, such as individual health insurance premiums and out-of-pocket medical expenses.
You can also offer your employees a taxable health stipend. This works similarly to an HRA but with fewer regulations and restrictions on which expenses can be reimbursed. While an HRA is often a better option, a stipend is excellent for organizations that want to offer a benefit to international employees, 1099 contractors, and those with advance premium tax credits (APTC).
In addition to health benefits, be sure to offer your employees various benefits and perks to ensure their unique needs are being met. Providing employee benefits improves employee satisfaction, which reduces turnover.
You can also offer employee stipends to your employees to help them pay for a wide array of expenses important to them. These taxable benefits allow you to easily reimburse employees for expenses such as health, wellness, remote work, transportation, and education costs.
With WorkPerks from PeopleKeep, you can manage your employee stipend benefits and create custom categories for any stipend you want to offer. You also have the option to offer one allowance to your employees to use on any expense of their choice.
Another way to reduce the costs of employee turnover is to benchmark your employee retention rate. By understanding how many of your employees are staying at your organization over a specific period, you'll be able to better work on methods to retain those likely to leave.
A mistake some organizations make is assuming their employees are happy. By fostering a high-feedback environment, you'll be able to see how employees feel about your organization. This will allow you to take action to improve areas that are lacking.
When an employee leaves your organization, it can be a big blow to your organization's morale, productivity, and budget. That's why implementing strong retention strategies from the beginning is so crucial, including offering quality benefits to take care of your employees.
Looking to build a flexible benefits package that helps keep your employees happy? Schedule a call with a personalized benefits advisor to see how we can help you offer flexible benefits on a budget.
Staffing and recruitment challenges fluctuate for companies of all types and sizes. Regardless of the state of the economy, employers should always be concerned about retention and turnover, as attracting and retaining talent involve significant costs in both time and money. Turnover also hurts productivity and results in the loss of institutional knowledge.
Employee retention is the ongoing process of keeping your staff. Companies go to great lengths to recruit excellent employees. Once the hiring process is over, business owners must immediately work to ensure that employees stay with the organization.
Most companies calculate retention rates annually. However, you can also measure the rate in smaller periods for faster results. The higher the retention rate, the better. If your retention rate is 80 percent, that means only 20 percent of employees left the business during a given period. Remember that retention rates vary by industry.
The lower the turnover rate, the better. If a company has a 20 percent turnover rate, it means 80 percent of the staff is sticking with the company. (It also means the employee retention rate is 80 percent.)
Balian suggested offering employees access to a gym membership, digital fitness classes, mental health apps, employee assistance programs and flexible work schedules to help keep workers happy and loyal.
Workers tend to stay longer at organizations where they are aligned with the values, vision, and mission, so identifying them during the recruitment process can pay long-term dividends in terms of retention.
Use this article to examine the training opportunities you have in place. Do your workers need tutoring, mentoring, coaching or on-the-job training to feel more valuable? Are your employees confused about expectations and how you define success? This article will help you evaluate your workers better. Read Help Employees Succeed Article.
Joan, as your managers look at these employee retention articles, they will see where they can strengthen the workplace and their management skills. When employees enjoy their job, their manager, their work environment, and their pay you will find your retention problem disappears.
In China, SMEs are the driving force of its social and economic development (Hadj, 2020; Hui, 2021), though they are presently finding it hard to operate at their full efficiency. This situation is exasperated by the COVID-19 pandemic, limited resources, low anti-risk capabilities, and diminished production scale (Zhanjie et al., 2017). These SMEs face bankruptcy and employee retention (Hui, 2021) due to adverse market conditions and economic uncertainty (Yu X. et al., 2019). China possesses approximately 770 million people in its workforce (Zhang and Chen, 2019), albeit maintaining the most significant global average turnover rate, that is, 18% (Friedman and Kuruvilla, 2015; Yu X. et al., 2019). Hence, practitioners and academicians continuously report the severity of employee turnover in China (Karatepe and Olugbade, 2017; Afsar et al., 2018).
Organisations are currently discussing varying strategies and practices to preserve their employees (Tanwar and Prasad, 2016; Bibi et al., 2018). Employee retention is a process through which employees are influenced to stay with their organisations for a longer period (Hom and Griffeth, 1995). Generally, employees are easy to retain, provided they see a good match with their employer (Umamaheswari and Krishnan, 2016). Extent literature concluded the significant role of various elements in relation to employee retention, such as intrinsic and extrinsic motivation factors (De Sousa Sabbagha et al., 2018), job promotion (Woodall et al., 2017), and bonus (Chinyio et al., 2018). Others include organisation commitment (Perreira et al., 2018), compensation (Colson and Satterfield, 2018), and knowledge sharing (Agarwal and Islam, 2015). This list can be extended to peer support, organisational culture, and work-life balance (Deshwal, 2015; Ombanda, 2015).
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