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How to stay competitive with modern approaches to employee retention

By: Benefits by Design | Tuesday September 10, 2024

Updated : Monday September 9, 2024

How to stay competitive with modern approaches to employee retention. With image of employees solving a problem at the office.

Have you ever wondered why your company might be dealing with a high turnover, or wanted to understand how you can prevent it? This blog will talk about why employee retention is important for your business and how you can make improvements to your retention strategies.

Did you know It costs 33% of an employee’s salary to replace them? but it’s more than just lost revenue. It’s time to rethink approaches to employee retention and understand the benefits for your organization beyond money.

We’ll also talk about common reasons employees leave, and why. Lastly this blog will go over engagement best practices which have a crucial role in job satisfaction, and therefore employee retention.

Why is employee retention important?

Employee retention is important when promoting the health and success of your organization. The time, stress and expenses that are needed when recruiting and training new employees is considerable and when your organization has high turnover it can severely disrupt your business’ performance.

When there is high turnover, it can lead to multiple challenges within your workforce which can include increased costs, loss of knowledge, and reduced productivity. It’s important to continually check-in with employees to ensure they are happy and satisfied. Great employee retention naturally produces the following benefits.

Reduced cost

When you can keep more of your employees for longer periods of time it reduces your costs because Replacing employees is expensive, with costs ranging anywhere from 16% to 213% of an employees’ salary.

Increased Productivity

When you focus on keeping your staff by taking care of them and incorporating their feedback, you create a more engaged and motivated workforce. Engaged employees are more committed to their roles, which leads to higher productivity.

Improved company culture

Employee retention plays a big role in enhancing your company culture. When employees are satisfied and feel valued, they are more likely to build stronger relationships with each other and customers, which will help your company’s reputation and success. By investing in employee happiness and retention, you create a positive and supportive work environment. Tenured, happy employees also show new employees that it’s worthwhile to stick around.

Experienced Employees

When employees stay with your company for long periods of time, they gain valuable skills and experience that benefit your organization. Otherwise known as institutional knowledge, this experience can be invaluable. Conversely, high turnover forces you to continuously train new employees, who must start from scratch, making it challenging for your business to maintain efficiency and productivity.

Common retention challenges

Retention challenges often come from several common issues.

Skills discrepancies – Struggling to find and hire the right people can lead to mismatches between employees’ skills and what they need to do their roles, which can result in unhappy employees and cause turnover.

Total compensation – Uncertainty about the appropriate compensation or whether the program you are offering is competitive enough it can lead to employees feeling undervalued. This will lead them to seek better wages and employee benefits elsewhere.

How to build a total compensation package that satisfies employee demands

Company culture – A non-existent, toxic, or poor company culture can also cause retention challenges. if you are not able to cultivate a positive and engaging work environment it can make it very difficult for you to retain talent. Additionally, when companies fail to support employee growth through education offerings and professional development, employees may feel unmotivated. It also gives the impression that they are never going to learn more or move up within your company.

7 Employee Wellness Activities to Keep Your Company Culture Thriving

Engagement best practices

Employee engagement plays a crucial role in supporting retention by enhancing job satisfaction, performance, productivity, creativity, innovation and profitability. It represents the holistic connection employees feel towards their workplace, which significantly influences their willingness to contribute and stay with the company long-term. When employees are engaged, they are more likely to work effectively and have strong leadership. Employees with lower engagement are four times more likely to leave their jobs than those who are highly engaged.

This shows that businesses who have good engagement practices consistently achieve better results, making it essential for staying competitive in the talent market.

Conclusion

Prioritizing employee retention within your workforce will lead to increased organizational success. The time, stress and money spent on finding new employees is huge and having good employee retention will help your company’s long-term goals.

Understanding and addressing common retention challenges, combined with implementing modern engagement tactics can lead to a more committed and productive workforce. When your employees recognize your effort in making a positive, trusting culture within your workforce, they are more likely to stay. In fact, Millennials are 22x more likely to work for a company with a high trust culture . Remember to continuously evolve your retention strategies so your company can stay competitive in the constantly changing market.