Why Employee Retention is Important
Employee retention is defined as the ability to keep employees long term at your business. Employee retention is absolutely crucial to a well run, consistent, and efficient business. Hiring a new employee may consist of many different processes, including-
- Recruiting new talent
- Screening potential applicants
- Various stages of interviewing
- Hiring and human resource processing
- Providing an adequate work environment
- Onboarding and general training
- Specific diversity inclusion and customer service training
- Investing in employee engagement strategy
- Ensuring new hire is a good fit for company culture
- Performance management and talent management
- Career development opportunities
- Requesting feedback about employee experience
Considering the amount of time and money that businesses put into training and hiring new talent, employees are a business's greatest investment and resource.
Whenever you onboard a new hire, overall business productivity necessarily will decrease as your current staff members train your new team member. In order for a business's human capital investments to be worthwhile, companies must make sure to retain the employees who require such expansive uses of time, energy, and money.
Short and long term consequences of low employee retention include-
1. Declining communication
- A top reason for employees not staying in positions long term is due to improper communication in the workplace. Make sure to encourage open, transparent, and consistent communication.
A great way to get started on improving communication in the workplace is by modeling by example. Human resource department staff and upper management personnel should make sure to always display and encourage proper communication.
2. Decreased productivity
- A low retention rate negatively affects your business, hurting both your pockets and overall company culture. Not only were many resources exhausted training a new hire who no longer works at your company, but those resources could also have been otherwise used more productively.
3. Wards off top talent
- A company with a low retention rate is less appealing to high performing and top talent candidates who may be wary of huge issues in your internal business operations. Of course, employees want to work in a welcoming and positive atmosphere, not one in which they have unhappy and unsatisfied coworkers.
The Relationship Between Engagement and Retention
Understanding the relationship between employee retention and employee engagement will help your businesses to improve both.
Generally, the better employee retention level your business has, the better your employee engagement. In fact, employee retention, employee engagement, and employee recruitment are rated as the top three workplace challenges for human resource professionals.
When employee engagement increases, individual employee satisfaction levels increase. When employee satisfaction levels are high, your employees will less likely leave their current position in search of other opportunities and are more likely to stay long term. High employee turnover rates may cause existing highly engaged employees to question their own engagement levels.
Human resource departments must focus on improving employee engagement to boost employee retention and vice versa. The great news is that there are methods that businesses can undertake that simultaneously improve both employee engagement and employee retention.
One such method is incentivization and recognition. When employees feel praised for a job well done, their positive impacts may just boost employee engagement and retention levels across your company.
Another way to increase both employee retention and employee engagement is through promoting a healthy work-life balance and placing an emphasis on improving your overall employee experience.
Perks like flexible work schedules, a personalized employee engagement strategy, better employee benefits, and more competitive salaries will help your business make sure top talent employees stay retained long term.