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<\/figure><\/div>\n\n\n\n– What Goes Into Employee Retention<\/h3>\n\n\n\n
Forming an employee retention strategy touches multiple facets of your organization. Employee engagement and satisfaction is one of the most obvious because employees who love their jobs are less likely to quit. You need to consider everything from compensation, professional development opportunities and the overall strength of the economy. <\/p>\n\n\n\n
Employee retention can become complex and finding the right metrics to measure is the best way to see it simply.<\/p>\n\n\n\n
– Why Employee Retention Matters<\/h3>\n\n\n\n
Why is employee retention an HR strategy? Because losing employees is expensive. Recruiting and training new talent too often leads to expensive onboarding processes, and high turnover doesn\u2019t look good for a company\u2019s culture. High turnover is a symptom of deeper issues including low employee morale, lack of recognition, poor employee-manager relationships, and lack of career advancement\u2026 the list goes on. Retaining your best talent benefits the growth of your company over time and brings immense value to your business. <\/p>\n\n\n\n
As we mentioned, high turnover is expensive. Retaining your current employees reduces the costs associated with recruiting, time, and effort it takes to train a new starter<\/a>. EBN<\/a> (Employee Benefit News) estimated in 2017 that it costs around 33% of a worker\u2019s annual salary to replace them, meaning you could be paying nearly $15k per employee making a $45k salary. If you have a high turnover rate, that cost really starts to add up. More concerning is the potential loss of productivity. Did you know that companies with high turnover rates lose, on average, $120,000 per lost employee? Not maintaining healthy retention is bad for your culture, as well.<\/p>\n\n\n\n Retaining employees didn\u2019t always rely on metrics, but, things have progressed. Data plays a role in nearly every company strategy, and especially Human Resources employee retention plans. We now have access to a wide range of new technologies and data measuring capabilities to figure out how likely an employee is to leave, stay, etc. <\/p>\n\n\n\n Categories you want to focus on include:<\/p>\n\n\n\n What\u2019s Happening:<\/strong> <\/em>Employee Turnover and Attrition rate are two of the most basic employee retention metrics. This basic reporting can tell you a retrospective view of what exactly is going on in your company\u2019s retention rates.<\/p>\n\n\n\n Why It\u2019s Happening: <\/strong> <\/em>Figuring out WHY your employee turnover is high, isn\u2019t as easy as to figure out. Trying to determine the exact cause of your turnover is different from finding the numbers alone. While it isn’t easy, it\u2019s still necessary to learn. If your company experiences high turnover rates, trying to pin down the \u201cwhy\u201d is essential to finding the solution. Are you paying enough? Is morale low? How\u2019s your company culture? The sooner you figure out why, the better. <\/p>\n\n\n\n What\u2019s Happening Next:<\/em> <\/strong>None of us are mind readers, or fortune tellers, so regardless of your field or industry, finding out \u201cwhat\u2019s next\u201d isn\u2019t easy, either. Thankfully, with data, you can determine when employees are at risk of departing your company. If you lack professional development opportunities, that could be a key reason employees are leaving. Have your employees not used their vacation? Burnout could be around the corner. Measuring metrics around your benefit usage is a good way to indicate what\u2019s about to happen next. <\/p>\n\n\n\n Low Employee Retention Is Bad\u2026 but so is holding on to everyone.<\/em><\/p>\n\n\n\n That\u2019s right\u2026 keeping ALL your employees isn\u2019t always good, either. It leaves less room for your newer employees to grow and develop. Having a high retention rate can indicate a lack of dynamism in the workplace, where employees are so comfortable, they aren\u2019t growing and moving. Maybe they aren\u2019t motivated enough to pursue more senior roles, which likely means they aren\u2019t improving their skills and putting in that extra effort – which you always want!<\/p>\n\n\n\n The first few weeks of a new hired employee are essential to retaining them long term. Did you know \u2153 of new hires quit within 6 months? Well.. that also means 2\/3rds knew in the first few weeks that they were staying with the company long-term. Now is the time to evaluate your onboarding strategy and make your new hires are set up for success.<\/p>\n\n\n\n Getting company wide feedback and metrics are important. You need to be able to drill down at a micro-level to see what is going on and where. This is where your managers come in. Have you ever heard of \u201cemployees don\u2019t leave bad jobs, they leave bad managers?\u201d This applies to employee retention. <\/p>\n\n\n\n It is never fun to lose an employee but we all know some employee departures hurt more than others. Top quality performers at every level of your organization need to be cared for. Losing a top performing employee has a larger impact on your bottom line.<\/p>\n\n\n\n Unfortunately, not all employees leave because they wanted to. Sometimes layoffs happen. Sometimes people are fired. Both voluntary and involuntary departures have a negative impact on an organization but that doesn\u2019t mean they are the same. Voluntary departure shows issues with how an employee was treated whereas involuntary departure suggests issues in your hiring process. When setting up metrics, you want to ensure you can distinct between voluntary and involuntary turnover. <\/p>\n\n\n\n How do you measure employee retention?<\/em> What is a good employee retention rate?<\/em><\/p>\n\n\n\n It\u2019s vital to give as accurate and data-driven number as you can for your retention rate. Divide the number of employees that have stayed for the whole time period by the number of employees at the start of that time period, then multiply by 100 to get the percentage.<\/p>\n\n\n\n Average retention rates are going to vary across your industry and job types. Example: Retail and Restaurant sectors tend to have a lower retention, but that\u2019s to be expected. It\u2019s worth researching into your specific industry to find out exactly where your goals should lie.– The Importance Of Data In Employee Retention<\/h3>\n\n\n\n
– What Matters When It Comes To Setting Employee Retention Metrics<\/h3>\n\n\n\n
![\"\"](\"https:\/\/peoplelift.com\/wp-content\/uploads\/2021\/06\/Peoplelift_photo-09.png\")
<\/figure><\/div>\n\n\n\nOnboarding Matters<\/h2>\n\n\n\n
Tighten up Management <\/h2>\n\n\n\n
All Departures are not made the same<\/h2>\n\n\n\n
Voluntary Vs. Involuntary<\/h2>\n\n\n\n
![\"\"](\"https:\/\/peoplelift.com\/wp-content\/uploads\/2021\/06\/Peoplelift_photo-12.png\")
<\/figure><\/div>\n\n\n\n– Employee Retention Metrics you Should be Watching<\/h3>\n\n\n\n
This rate helps you answer a key question: Are your most talented employees leaving? If the answer is yes, you have a big problem. If not, then this issue might not be as bad as originally thought. It does require additional work and effort to evaluate how much value each employee brings, but it\u2019s worth it in the end.<\/li><\/ul><\/li>
Your ideal retention rate is defined by factors that are specific to your business, like the company\u2019s past recond, and internal promotion rates. <\/p>\n\n\n\n