Even though losing an employee can be beyond the organization’s control, it is crucial for businesses to find and retain top talent to succeed in the current economy. This is especially true for smaller businesses that compete with companies with larger budgets.
There are many reasons why an employee may decide to quit their job. They may find a better position, decide to go back to school, or they may be unable to continue working due to personal reasons.
According to the Society For Human Resource Management, replacing an employee can cost your business anywhere between 50% to 60% of an employee’s annual salary. That means that if you have to replace a position that is worth $80,000 a year, it could cost you up to $48,000 to hire someone new. If these numbers seem high to you, consider everything that goes into hiring a new employee, including recruitment, training, and HR hours. Factor in some delays in production and you’ll see how the costs add up. The list of expenses may go on (and on), depending on how large your company is.
How to hold onto your staff
The study further explains that there are specific variables that managers should monitor closely to predict when an employee may be thinking about leaving. These include:
• attitudes of job commitment and satisfaction
• quality of relationship between the employee and their supervisor
• clearly defined roles and expectations
• promotion and growth opportunities
• workgroup cohesion
These factors play a big role in an existing employee’s decision to leave or stay. If an employee scores any of these areas low, they might have one eye on the door.
Links, Fit, and Sacrifices
Work on these 3 factors to “embed” an employee in your company.
Links – These are connections that the employee has to other people or groups within the organization. The more relationships your employees have with one another, the less likely they will want to leave because doing so may risk those relationships.
Fit – This describes how an employee fits in with the company culture. If the employee does not feel comfortable in their work environment, or if the company does not cater to their wants and needs, then that employee won’t have a hard time leaving.
Sacrifices – This refers to the balance between work and personal life. Employees need to have a happy medium between the two. If not, they may feel like they are sacrificing too much and not being compensated enough.
As is normally the case, preventative measures can save you a lot of time and money. Employers should not wait until they see the whites of their employee’s resignation letters before they take action.
Focus on links, fit, and sacrifices to foster a satisfying working environment. This will lead to improved employee performance as well as improved employee retention.