Employee retention isn’t a hot topic in business by accident. Unemployment figures are at a historic low. Employers are having to work harder to attract and retain the best talent.
Combined with the productivity puzzle that continues to plague Britain, UK businesses are having to rethink strategies to gain competitive advantage and achieve success.
Employee engagement is increasingly acknowledged as a key driver of productivity and something worth investing in.
Happy, engaged employees are more productive, innovative, and more likely to stick around. Engagement is the forerunner of employee retention.
Let’s take a look at the reasons why employee retention is now more important than ever.
The UK is still waiting with trepidation as to what the impact of Brexit will bestow upon British businesses. Sectors likely to be hit hard by a dwindling EU workforce are jittery.
The hospitality industry could face a shortfall of one million workers within 10 years if migration is restricted.
Retaining talent through a period of economic uncertainty and change is at the forefront of many business leaders’ minds. It is widely acknowledged that Brexit could lead to skill shortages.
Employee retention will be increasingly important in a post-Brexit UK.
Employers are already focusing on how to attract, recruit and retain employees.
Millennials aren’t afraid to change jobs, but they do value job security.
They also care about the values and ethics of the businesses they work for.
By 2020, millennials will make up thirty five percent of the global workforce. Businesses need to up their game if they want to retain millennial talent.
According to Deloitte’s 2018 Millennial Survey, the millennial generation is feeling uneasy about the future.
Decent pay, flexibility, and positive company culture are most likely to attract millennials. Millennials are attracted to companies that are making a positive impact on local communities and the environment.
The Deloitte survey found that company actions strongly influence how long a millennial is prepared to stay with an employer.
It is worth remembering that they, like the rest of us, are also consumers. How they purchase is also influenced by a company’s ethics. Social responsibility is important both as an employee and as a consumer.
If businesses are serious about retaining staff then they need to build a business culture conducive to millennials.
Business culture is being pushed up the corporate agenda. Why? It has huge potential in terms of productivity.
Employee retention is a part of and a consequence of business culture. Businesses with poor culture tend to have higher staff turnover rates.
Attracting and retaining skilled employees is fundamental to business success. Employee turnover is disruptive.
An unfilled position means work isn’t getting done and a new employee needs training to get up to speed. Every single time a decent staff member leaves, productivity suffers.
High staff turnover costs businesses a lot of money. Employee replacement costs can reach up to £11,000 for an employee earning the UK average salary of £27,721.
Your most valuable employees could cost a lot more to replace if they decided to leave. It’s plain to see that the cost of losing more than one employee could have quite an impact on a business’s bottom line.
In addition, there is the issue of a decrease in productivity during an employee’s notice period, which is multiplied if gardening leave is given to protect the reputation and success of the business.
Excessive or undesirable staff turnover affects morale. When staff leave in droves or your best people decide to move on, it usually has a negative impact on the team left behind.
A high turnover rate suggests morale wasn’t in a good place anyway. But it is a sign you need to focus on what is causing your staff to jump ship.
Low morale and high staff turnover suggest your culture is poor. Begin by asking your employees why they are leaving through exit interviews and use employee engagement surveys to understand how your staff are feeling and establish what needs to change.
When staff turnover is high, your business is more than likely operating with too many inexperienced people.
With inexperienced staff and inevitable communication gaps, your customers will have an inferior or inconsistent experience with your product or service.
Fail to address retention issues and you could lose customers, profit and jeopardize your business altogether!
If businesses are serious about lasting success, they need to stop putting band-aids on the problem of poor retention.
How Can Leaders Focus on Employee Engagement and Retention?
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