Employee retention: keeping the right staff on board

In today's competitive marketplace, employee retention is a critical factor in the performance of a business, and the loss of a key employee can have a dramatic impact on a company's success.

Not only do businesses lose intellectual capacity and corporate knowledge when staff leave, but, if not managed carefully, the repercussions of employee turnover can adversely affect morale, customer relationships and your corporate brand or image.

Angela Giacoumis from South Australian recruitment company Careerlink gives us the facts, figures and solutions surrounding the complex issue of employee turnover.

The true cost of employee turnover"Staff turnover is expensive," says Angela. "In addition to the obvious costs, such as termination/resignation, hiring, recruitment and training costs, there are many indirect or hidden costs associated with losing a key staff member."

These include:

• the loss of intellectual property
• the loss of corporate knowledge
• damage to the corporate brand
• lost business opportunities
• increased stress
• lost or damaged customer relationships

But how does this affect the bottom line?

According to Angela, estimates of staff turnover costs range between 0.5 and 2.5 times an employee's annual salary. So if a company of 130 employees is experiencing a turnover rate of 20 per cent, and the average salary per employee is $50,000, then the annual cost of turnover would be at least $650,000.

Improve employee retention

Employee retention is ultimately about how an organisation manages its relationship with its most valuable asset - its people. And while employee turnover is a complex problem involving many factors, Angela says there are a few golden rules every business should consider. They include:

• promoting a culture of engagement and learning
• investing in your people and showing them you care by committing to their development and success through training and coaching
• promoting a work-life balance and offering flexibility in working conditions
• providing meaningful work and a culture that promotes a sense of belonging
• making reward and recognition part of your company's 'DNA'
• managing retention as a business 'metric', making leaders accountable for retention
• building a brand that motivates and inspires your people.

Angela says the benefits of implementing these strategies to retain your key staff are lasting, and include:

• increased job satisfaction, motivation and performance
• reduced workplace stress and anxiety
• more satisfied customers
• higher staff engagement and productivity.

The bottom line

In business your people are your most important asset, and letting good employees slip through your fingers can cost you more than lost time and inconvenience.

So talk to a recruitment professional today about implementing some employee retention strategies that will ensure your business hangs on to its most valuable assets.