Employee Retention
The company culture is built around the established values of the organization. When employees feel a connection to these values, they are far more likely to stay with the organization. This is why hiring with a strong cultural fit in mind is so important.
Recruiting & Hiring can cost about half the annual salary of the new hire and sometimes a bit more. If retention rates are low, this places a huge financial burden on a company which in turn affects the company’s bottom line.
The benefits of retaining employees are endless. It reduces the amount of time spent on training new hires which allows employees to stay and implement the skills they have learned on the job and reinvest these back into the company. This institutional knowledge cannot be passed across to new recruits so easily and is a huge opportunity cost for your company.
Furthermore, these new employees take time to reach the same standard as those who have left and it can take up to a year or even 2 to achieve the same levels of productivity and efficiency.
Constant turnover or revolving doors can also be damaging for the company’s culture. Relationships are built over time and this develops the harmony and chemistry among staff within the company and the positive atmosphere of the workplace. If employees are leaving, this can damage the culture that has been created and may encourage others to leave as well. Additionally, company culture itself is hugely impactful upon employee engagement and productivity therefore impacting the whole output of a company.
The benefits of employee retention go beyond this, yet these are just some key factors that explain the importance of retaining employees. Retention has become the new focus. It is far less costly to retain than to acquire, and it is worth the effort to keep good employees around.
How to calculate employee turnover:
You can compare your companies turnover vs your industries average, for restaurant you can get that info National Restaurant Association.
Make a plan to reign in turnover rates, while amping up your retention efforts at the same time.
Improving retention of good employees should be your most important goal. If you create the right culture and environment through proper coaching and development and get your team excited about coming to work the results will be - improved top line and bottom line results which is a byproduct of lower turnover.
Great training process, transparency, and having a mentorship program helped increase retention.
In my years of experience the restaurant industry the number one reason for employees staying around is the opportunity for professional growth. If employees aren’t moving up in the company, they are going to leave the company.
Employee engagement is also crucial to retaining your staff, employees who leave within the first year cite feeling “disconnected” with the organization.
Fair compensation also plays a huge role. Keeping up with current compensation practices is a great turnover combatant. Although employees need to feel their value in more than just monetary ways, fair pay and benefits are at the top of that list.
They Feel Recognized and Valued employees said they’d work harder if they were better recognized at work. If we know one thing in leadership, it’s that engaged employees are retained employees.
Offering recognition is probably the easiest and most effective tool at any employers’ dispense, yet it seems to be the hardest for leadership to grasp. Simple signs of gratitude like a “thank you” note, public recognition of a job well done or even a small gift card are all things that can increase retention rates.
Companies that held frequent and continual training sessions and devoted resources to employee development experienced significantly longer staff tenure.
The bottom line is people stays when they are: Engaged, Trusted, Valued, Empowered, Appreciated, Involved, Paid Well and Mentored.
The BIG question here is: Why do people leave? What would do differently to help reverse a high turnover situation?
