Why retention is more important than recruitment

Which benefits would they most like to see going forward? How do they feel about their current work-life balance? Getting answers to these questions from your employees is easy to do thanks to technology, and it can help inform your roadmap for boosting retention.

Once the time comes to start implementing new ideas or policies, turn to technology again. One thing that modern professionals want is more flexibility in where, when, and how they work.

Offering remote work or work-from-home options to your team can help you to combat the many reasons associated with employee turnover, from the need to stay home with kids or pets to an aversion to commuting.

By using these tools in concert and combining them with other efforts, such as expanding your employee benefits programs, you can reinvest in the terrific employees that you already have. Hi there! Welcome to HR Technologist. It also offers opportunities to improve company performance across a number of key metrics. The following are 10 ways effective employee retention strategies and processes benefit organizations.

Costs include advertising, interviewing and screening. Onboarding expenses, like training and management oversight, also add up. Other issues include lost productivity, lower engagement, customer service problems and company culture impact, all of which compounds the cost of turnover.

A revolving door environment can dampen employee morale. Aside from lost connections, employees who remain may have to take on heavier workloads or responsibilities. As a result, their motivation and satisfaction can also nosedive. Just as concerning is the contagious nature of turnover. Employees may decide to leave because they notice others are job hunting, talking about quitting or actually leaving the company. Organizations with successful employee retention programs can lift employee morale, enable greater connectedness and engagement, and create contagions of positive emotions in the workplace.

One crippling cost of high turnover is the loss of institutional knowledge, skills and relationships — within the organization and with customers and partners — that disappear when an employee exits. The organization also loses the potential value the employee could have delivered, also known as the opportunity cost.

When senior employees depart, the loss can impact succession planning as well. These employees — particularly top performers or those with in-demand skills — are often at risk for turnover even in times of high unemployment. Organizations that focus on retaining more senior or experienced employees see significant returns as these professionals are apt to solve complex issues on their own, which benefits the organization.

Replacing an employee carries significant costs. After an organization finds qualified employees and successfully recruits and onboards them, they have to be trained. Should a new hire leave, all that money goes down the drain.

By focusing on employee retention, recruiting costs can be dramatically reduced. Another consideration is to recruit from within the organization. The cost to train and reskill an employee from within can save an organization tens of thousands of dollars per person. Persistent turnover causes a host of issues for employers. The most immediate impact is loss of productivity. On average, it can take a new hire one to two years to reach the productivity of an existing employee.

In addition, new hires need time to build relationships with co-workers and customers. An understaffed environment also causes problems of its own — among them, employee overtime and burnout, lower work quality and delays. Effective employee retention can save an organization from productivity losses. High-retention workplaces tend to employ more engaged workers who, in turn, get more done. Engaged employees are more likely to improve customer relationships, and teams that have had time to coalesce also tend to be more productive.

These interactions depend on employees whose own experiences can impact how they engage with customers. This is where turnover can take a toll. For example, new employees might take longer to get things done, may be less adept at problem-solving and are more prone to customer service mistakes — all of which can damage the customer experience. On the other hand, satisfied employees typically have higher morale and capabilities that shine through when working with customers.

Costs of employee turnover The costs associated with replacing an employee can be generally sorted into one of three categories: separation costs, recruitment costs and productivity costs. Separation costs are the immediate costs an employer incurs when an employee leaves. These include things both routine and anticipated — severance pay, unemployment insurance claims depending on the circumstances , continued benefits, etc.

Recruitment costs are those that an employer incurs looking for someone to fill a position, from the time it takes to update the job description to the cost of training the new employee, and everything in between. The longer it the hiring process takes, the more expensive the recruitment costs become. Productivity costs are a little harder to quantify than separation costs or replacement costs.

Included in this category are not only the hours of productivity the company loses while the position goes unfilled, but also the time other employees spend trying to pick up the slack.