When a good, qualified employee leaves a company, the cost to that company is significant. Finding ways to keep those valued workers is essential.
Lately, I’ve written a number of blogs both here on the NationaLease site as well as on FleetOwner’s IdeaXchange blogsite, regarding the problem of recruiting qualified employees at a time of very low unemployment. One of the ways to mitigate a shortage of good workers is to keep the workers you already have. Much like the way it is much less expensive to keep a good customer than it is to gain a new one, so it is considerably less costly to retain an existing employee than it is to train one.
If you’d like to know what that cost of replacement could be, the 2017 Retention Report by the Work Institute estimates that it costs employers 33 percent of a worker’s annual salary to hire a replacement if that worker leaves. Of course, that percentage goes up for higher positions within a company. But looking at money is only part of the expense that employers experience. There are indirect productivity costs that must be assessed. These include the loss of knowledge when an employee leaves, the time spent finding a replacement, the time supervisors need to oversee a new hire, and the time new hires need to become fully functional.
More than two-thirds of companies worry about employee retention
An article in CFO earlier this year noted that 66 percent (two-thirds) of companies surveyed were very concerned about employee retention. Yet even with that number, most of those companies aren’t looking at salary increases as a way to keep their employees. That is because companies are concerned about the economy…acknowledging that as strong as it currently is, there are too many variables and unknowns that could result in a slowdown or a recession. Companies instead may offer bonuses or perks, which are either one-time occurrences or benefits that can easily be reduced or eliminated.
I wrote an IdeaXchange blog last month that dealt with this issue and, based on a webinar I listened to earlier this year, here are some of the ways companies are trying to keep their employees satisfied enough to stay with them.
- Communication is key – Make sure you have some face time with employees. That means speaking with them one-on-one. Recognition and reinforcement to let them know they matter goes a long way.
- Supervisors can make a difference – One of the major reasons an employee will leave is problems with his or her direct supervisor. So when a new employee starts with you, check in relatively quickly to see if the relationship between employee and supervisor is healthy and step in to correct the situation if it is not.
- Hear what your employees are saying – You can’t talk to every employee all the time; however, you can provide surveys on a regular basis. This will provide valuable insight since people will sometimes say something anonymously that they would not say face-to-face.
- Never stop improving – There is always money budgeted for recruitment, but make sure you have a budget for retention as well. And keep trying new ways to keep your employees engaged.
The blog that I wrote was directed at the problem of retaining drivers for fleets, but the issue of employee retention cuts across all industries, all positions at all pay levels, and all across the country. As long as the unemployment rate remains low, keeping your existing employees as part of the team is the least expensive and most productive pathway to success.