Employee retention is a top concern for 57 percent of employers, according to a 2015 PayScale report. Hiring and training processes cost time and money, and as a result, turnover costs time and money. Companies would rather spend money on ways to improve employee retention than hire and train new ones. To improve employee retention, follow these five steps and you’ll be well on your way to building a loyal, satisfied and long-lasting workforce.
Onboarding goes beyond the first few weeks. In fact, 50 percent of hourly employees leave their position within the first 120 days and organizations using effective onboarding say retention rates are boosted by 52 percent.
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According to the SHRM Foundation’s report Onboarding New Employees: Maximizing Success, employees who experience a well-organized onboarding program are 69 percent more likely to stay at an organization for at least three years. Onboarding acts as your employee’s introduction to your company. If you make a poor first impression, your new hires may not understand the company culture, mission or values. If it looks like you’re bleeding employees within their first six months, your onboarding may be a problem. Spend less money on onboarding now or spend more later on hiring – which would you rather do?
When a candidate has an amazing education, years of experience and knows the industry like the back of his hand, you might be tempted to hire him on the spot. But you’d be short-changing yourself if you didn’t evaluate for cultural fit. Eighty-two percent of companies say measuring cultural fit is very important. According to a study conducted by Millennial Branding and Beyond.com, 43 percent of HR professionals surveyed ranked cultural fit as the most important factor when evaluating candidates. If you’re not ensuring your candidates fit, then you could be on your way to a bad hiring decision. Talk to candidates about your culture, the way you work, and how the organization is structured. If a new hire isn’t interested in the kind of company you’ve built, it will show in their performance.
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Want to find employees more likely to be a good cultural fit? You may want to ask around. After two years, companies retain 45 percent of referred employees, compared to just 20 percent of employees who were not referred. Your current employees are familiar with what it takes to be successful at your organization, so they can act as a prescreen when assessing if members of their network have what it takes, too. Your employees are unlikely to recommend someone who’s a poor fit for a job, as they don’t want a referral to reflect negatively on them. Additionally, companies spend significantly less time and money recruiting and hiring referrals. It’s a win-win for everyone!
If you find yourself repeatedly denying employees’ requests to work nontraditional hours in order to care for loved ones or take care of other responsibilities outside of work, it may be time to rethink your position. Organizations that are flexible about when and where employees work have higher retention rates.
Since allowing 85 percent of its workforce to work remotely, education company Kaplan has not only improved retention rates, but expanded its talent pool and reduced office space costs. Another area of cost savings may be salaries. According to research findings by Global Workplace Analytics, 36 percent of employees would choose a work-from-home arrangement over a raise.
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Of course, even if you allow employees to telecommute, you still have to pay them sufficiently. A good employee knows their value. While you may think you lucked out when they negotiated their salary under market value, it could come back to bite you when they accept a better offer and leave. In analyzing more than 13,000 salaries, HR software company Namely found that 79.5 percent of employees who earn between $80,000 and $100,000 stick around for two years. In contrast, those who earned below or above that range were 45 percent more likely to leave. The cost to replace a mid-level employee earning $80,000 a year can be as high as 150 percent of their salary – or $120,000. So pay your employees well from the get-go – it well save you money in the long run.
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Turnover is inevitable. There’s no company in the world with a 100 percent employee retention rate. But between implementing the right evaluative measures and taking a holistic, employee-centric approach to managing your talent, you can absolutely inch your organization closer to that mark.
Recruiterbox is considered the most user friendly hiring software on the market. If you’re ready to take your recruiting and hiring to the next level, request a Recruiterbox demo today.