In 2014, CareerBuilder conducted a survey to determine what affects employee retention most. The common reasons cited by employees seeking other job opportunities included:
|Wanting a career, not a job||Underemployment|
|Lack of Training||Feeling Overlooked|
|Lack of advancement||Feeling underpaid|
|Mismanagement||Looking for more work/life balance|
It’s not as common today to stay with the same company your entire career as it was 30 years ago. With the job market as competitive as it is today, it’s expected to see young professionals moving from job to job in order to increase their chances of moving up within a company to advance their careers. But, with every change, companies come face-to-face with hidden costs, including:
Lowered productivity – the work of the employee has to be given to others within the department until the position has been filled. Staff can become overworked and ordinary work may fall behind due to extra tasks being added to someone’s load.
Lost knowledge – each employee has specific knowledge of their job responsibilities. It’s uncommon to have a detailed how-to of each person’s responsibilities. This leads to a learning curve for others within the department. Depending on how long they have been with the company, they may have historical knowledge and an understanding for how projects are completed.
Training costs – When a new employee is hired, their manager, or others within a department, must take time out of their own schedules to teach and help new employees understand their tasks. This takes others away from their own work and leads to a lowered productivity.
Recruitment – HR has to recruit new candidates, post advertisements, and screen resumes, which takes time and money. Sometimes there is extra cost associated to stay at the top of the search list.
Interviewing costs – reading through resumes, phone calls, face-to-face interviews and decision-making take valuable time for multiple people within a company.
So, what is the estimated cost for hiring and training a new employee? Forbes reported that for entry-level positions the cost can be 30-50% of the annual salary to replace and train a new employee. Those percentages go up as skill levels increase. The expense of training highly specialized employees can be around 400% of annual salary. Listed below are some ways you can entice your employees to stay:
Competitive benefits package – Benefits are more than just insurance and PTO. Schedule flexibility, telecommuting and annual bonuses and raises are a great incentive to stick around.
Philanthropy – Young professionals are looking to feel good about their company and their involvement within the community. By showing that your company cares about the local community and charitable causes, you can make your employees proud to be a part of something bigger.
Reviews – Annually reassess goals and responsibilities. Get feedback from your employees to know what they do and do not like and make changes when appropriate.
Incentives and perks – When employees are working hard, meeting goals and helping the company achieve success, reward them with bagels on Fridays, annual bonuses or a fun day out as a team.
Advancement – Employees want to know they can go places within the company. Promoting from within before looking externally for candidates will help employees feel valued.
Development – Tuition reimbursement and training helps develop your employees and build the knowledge they need to go above and beyond within the company. Encouraging employees to better themselves shows that the company believes in their potential.