Wednesday, April 24, 2024

Finders keepers: retaining employees and lowering costs

Retaining employees saves time, effort and money. A good employee experience or engagement program are crucial.

Steve Bennetts is Senior Principal Consultant, Employee Experience, at software and management company Qualtrics. He said: “The cost of employee turnover can be massive.

“Some estimates put it at up to 200 per cent of the employee’s annual salary. Others say it costs between six and nine months’ salary to replace an employee. Even on the lower end, these estimates illustrate the crucial importance of retaining employees.

“And this doesn’t take into account the lost opportunities as a result of not retaining employees, which can be much harder to quantify but that experts agree is significant.”

Less loyal than employers think?

In a blind study, Qualtrics asked 800 recently promoted employees with outstanding performance reviews three questions.

  • What makes them happy?
  • What makes them work?
  • Why do they stay in their current job?

Top performers, the study found, are most likely to be attracted to a higher salary and the ability to work from home. Other employers contact them about positions more than four times per year. Nearly nine times out of ten (88 per cent of the time), the employee will inquire about the position. This means their loyalty may not be as strong as their employers like to think.

Top three reasons employees stay

According to the study, the top three reasons that motivate an employee to stay are:

  1. Pay
  2. Work enjoyment
  3. Work/life balance.

Commenting on the findings, Mr Bennetts said: “Identifying the key drivers of employee loyalty is important so managers can implement the right retention and engagement programs that will resonate with their team members.

“It’s important to continuously measure employee sentiment and act accordingly to update existing programs or implement new ones. Employees are a business’s most important investment, so it’s important to maintain that investment for long-term loyalty and success.”

So how do employers measure employee loyalty or retention? Mr Bennetts identified two main factors: recruiting the right candidates and having an employee experience program.

1. Identify the right candidates from the start

Filling a vacant role quickly shouldn’t be the goal, Mr Bennetts says. This can lead to hasty decisions and “the wrong fit”. Instead, organisations should take their time to ensure candidates are the right fit for both the role and the company.

2. Invest in a employee experience program

Steve Bennetts said: “Once an organisation has the right people in place, it’s important to continue establishing touch points with employees at appropriate times in the employee life cycle to ensure consistent engagement.

“Often, it’s a culmination of the smallest things that can shift employees’ perceptions of their employers. For example, providing employees with the flexibility to work from home when needed. Or to leave early so they can pick their children up from school. These could be the difference between retaining a valuable, skillful employee and having to replace them at great cost.

“Businesses that can build strong relationships right at the start, then continue to cement them throughout the employee journey, can reduce turnover and associated costs. Importantly, they can build strong, collaborative, high-performing teams that help drive organisational growth.

“Having a channel for, and access to, real-time feedback is key. It gives an organisation visibility not only to act, but also to be proactive about their employees’ needs.”

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