With a growing number of companies revamping their onboarding process in an attempt to boost retention, it’s becoming increasingly obvious that this detail is of great importance.
Of course, there are companies that never think twice about retention. Instead, they take this approach: if we lose one employee we can always hire another. While this is true, it doesn’t mean it’s the right thing to do. And it definitely doesn’t mean it isn’t without drawbacks.
Before we go any further, now is a good time to share a brief excerpt from a Forbes article on employee retention. It deals with the importance of tracking retention data:
“If you don’t measure it, it won’t improve. If you don’t know which line managers are doing well and which are not, you’ll not know who needs coaching. And if you don’t know where you stand relative to your industry, then you’re probably one of the worst.”
Adding to this: if you don’t understand the importance of retention, you won’t put the necessary time and effort into this part of your business. Searching for a free recruiting management system? Recruiteze is number one for helping small businesses recruit easier and more efficient. Try it today with no obligation what so ever.
Here are the Biggest Benefits
If you don’t fully understand the benefits of retaining employees, you aren’t alone. There are a lot of companies in the dark in regards to why this is important. But don’t fear. You are about to be presented with seven benefits that will change your thought process for the better.
- Save Time
Have you ever asked yourself this question: how much time does it take to hire one employee?
There is a lot that goes into this. From writing a job post to replying to applicants to setting and conducting interviews, the hours will continue to pass.
The only exception to this is if you don’t have to hire at all. With a high retention rate, you will not find yourself replacing employees regularly. Sure, you may bring new people into the company as it grows, but this is a good problem to have.
When you increase your retention rate, you can be rest assured that you will save time on all aspects of onboarding. Subsequently, the people in charge of these tasks will have more time for other responsibilities that are just as important (if not more so).
- Save Money
There isn’t a company out there that doesn’t want to save money. Even if things are going well, it doesn’t mean you should throw money out the window. Unfortunately, this is exactly what happens when your retention rate suffers.
When employees stick with your company, you don’t have to concern yourself with the cost of finding a replacement. And remember this: you are doing more than finding a replacement, you also have to train this person.
Check out this statistic shared by Zane Benefits:
“Some studies (such as SHMR) predict that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average. For a manager making $40,000 a year, that’s $20,000 to $30,000 in recruiting and training expenses.”
Now do you see just how much money it can cost to replace an employee? Imagine incurring this cost on a regular basis.
By boosting your retention rate, you can cut back on the cost of recruiting and training. Depending on the size of your business, this could equal savings well into the hundreds of thousands of dollars (or more) per year. How do you feel about that? A recruiting management system can be great for also cutting costs, keeping and tracking your talent. Start using Recruiteze today and make your hiring and retention process more manageable.
- No Need for Training
Once you have an employee on board and working at a high level of efficiency, you can feel good that he or she can handle anything that comes up.
But if this person leaves and you need to bring somebody else into the company, it’s time to start the training process.
When you hire a new employee, this person will not be up to speed like the person they are replacing. Even if they have experience and knowledge of the industry, they don’t know the inner workings of your company. It will take time for the person to fully catch on.
In addition to the “ramp up time,” don’t overlook the fact that somebody has to train each and every new hire.
- Team Cohesion
Just like a championship sports team, you never want to break up something that is working. While all good things eventually come to an end, you don’t want to let this go easily.
A team that has been working together for many years will have a good sense of what each person is good at. This cohesion goes a long way in ensuring that everything runs like a well-oiled machine.
You should never overlook the importance of cohesion. It’s not as easy as it sounds to plug somebody else into the system without missing a beat. Even if you are able to find the right person for the job, it will take a while for him or her to reach their max performance.
- Happy Employees
When a person is happy at your company, it’s up to you to do whatever it takes to keep them on the team. This is not always possible, such as if somebody is moving out of town with a spouse, but there are other times when you can make decisions that will entice the worker to stay.
A happy employee is one that will do his or her best for the company. This type of person is also fun to be around, which helps everybody else perform at a higher level.
When you retain employees, those who are truly happy at the company, you will realize that the overall vibe and atmosphere remains positive. And as you know, this is a big part of long term success.
- You Know What You are Getting
After so many years on the job, you know that a good employee will never let you down. You know that this person will show up, day after day, and do what is asked of them. There is a lot to be said for this.
When your retention rate is high, you are always dealing with new people. This isn’t always a bad thing, but it makes for quite a bit of uncertainty.
How will you know the person has the best interest of the company in mind? How will you know that they are dedicated to the goals of the organization?
The longer a person stays with a company the more trust you can put in them.
- High Level of Comfort
This may be the last point on the list, but it’s still extremely important. When turnover rate is low, you will always have a good idea of who makes up your workforce. You have a good relationship with these people because they have been on the team for an extended period of time.
Just like anything in life, the longer you are around something or somebody the more comfortable you become. And when people are comfortable at work they tend to perform better.
A high turnover rate means new employees coming in on a regular basis. This doesn’t mean you can’t get comfortable with them, but you may never feel as if you can settle in. You are always waiting for the next person to leave and for their replacement to come walking through the door.
Questions to Answer
Now that you better understand the top benefits of retaining employees, it’s time to focus more effort on this part of your business. It is only natural for people to change jobs, but you don’t want this to be a regular habit among your workforce.
Here are some questions you can answer to get a better overall picture of your situation:
- Have you tracked retention data in the past?
- Have you addressed issues with retention?
- What strategies do you have in place to boost retention rate?
- Do you track the reasons why people leave the company?
- Are you in line with the rest of your industry in regards to retention?
- Do you have a recruiting management system to make tracking talent easier?
These questions will get you thinking. These questions will help you better understand where your company stands, what you can do to improve, and how this will impact your organization as a whole.
Final Thoughts
It’s easy to push aside the benefits of employee retention, thus turning all your attention to other details that you consider more important. But this would be a mistake.
There will always be employees who move on. There will always be times when you need to make a hire. Even so, you can improve your company by better understanding the benefits of retention.
Retention: it’s a simple word, but one that can save your company time and money!
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