For a business to thrive, finding and retaining the best employees is a crucial component. Creating a retention strategy for your organization can save big money. It can cost 33% of an employee's annual salary to replace a current employee. Some studies (such as SHRM) predict that every time a business replaces a salaried employee, it costs 6 to 9 months' salary. For example, a CAP study found average costs to replace an employee are:
16 percent of annual salary for high-turnover, low-paying jobs (earning under $30,000 a year). For example, the cost to replace a $10/hour retail employee would be $3,328.
20 percent of annual salary for midrange positions (earning $30,000 to $50,000 a year). For example, the cost to replace a $40k manager would be $8,000.
How can you keep your employees?
There are many studies on best practices for employee retention. Here are a few proven strategies:
Create ways for employees to provide feedback about the work environment: Assuming employees are happy is risky. Positive morale is the backbone of a thriving organization. High morale can increase productivity, creativity, safety, and overall satisfaction.
In a study by Bersin & Associates, organizations with recognition programs that were highly effective at improving employee engagement had 31% lower voluntary turnover than those with ineffective recognition programs. As it stands, 66% of workers are likely to leave their job if they feel unappreciated.
Benefits are crucial for employee retention. Employees want benefits that fit their personal needs.
Make sure your employees know how their work matters in the company. The purpose is essential, and 57% of younger Americans said that they wanted to be part of something that was enjoyable or made a difference in society.
Understanding the high cost of losing an employee makes retaining quality employees a top priority for successful organizations. There is not an easy "one-step fits all" for employee retention, so contact Superior Benefit Specialists for more information to help you design a strategy that fits your individual, organizational needs.
Posted on Jan 6th, 2020