8 Benefits of Employee Retention

Finding and keeping great talent is the goal of any organization that wishes to succeed. Employee turnover can be expensive and time consuming. It can also impact employee morale and the organizational culture overall.

In today’s competitive hiring market, companies are scrambling to implement employee retention strategies. To help you understand employee retention and its benefits we’ve put together this helpful guide.

What is Employee Retention and Why is it Important?

Employee retention is the ability of an organization to prevent employee turnover. Employee retention is often seen as an extension of the culture of an organization and it can often be an indicator of employee satisfaction in the larger health and success of the organization.

A study from The Bureau of Labor Statistics found that over 3.5 million people quit their jobs every month. When an employee leaves your organization there can be many effects felt throughout. Hiring and training a new employee is estimated to cost nearly 2 times as much as a year of a current employee’s salary. 

There are also several organizational impacts to consider. When an employee leaves all the knowledge they gained over their years of experience leaves with them. This lost knowledge represents a roadblock to productivity as well.

8 Benefits of Employee Retention

When you begin tracking important employee retention metrics, you’ll also begin to see the many benefits of having great retention strategies. Here are just a few benefits of good employee retention strategies. 

1. Employee Loyalty

The loyalty an employee feels towards their company is directly related to their overall employee experience working at the company and how they relate to its goals. Additionally, loyalty is a compounding benefit. With each year the employee stays, they grow more and more loyal to the company to compensate for the time and effort they’ve put into their work. Loyal employees are more likely to meet deadlines and report their hours honestly. 

2. Lower Costs

We’ve already discussed how hiring a new employee can be 2 times more expensive than retaining one, but there are other costs associated with employee turnover as well. Some companies can spend over $1 trillion dollars in expenses to fill their roles. This includes the cost of advertising the open position, screening prospective employees, and interviewing each candidate. Working to keep employees at your organization can save literally millions of dollars over time. Not just in direct costs, but also in the productivity and quality of work. 

3. Better Customer Relations

One of the most important parts of any business is the customers and clients. Without them, there is no business at all. As clients frequent your organization they build relationships with your organization that can carry a lot of weight in influencing their purchasing decisions. One of the best ways to foster these relationships is by keeping your employees around. A recent study found that engaged employees can lead to a 20% increase in sales. Keeping your employees around helps keep your clients around too. 

4. Strengthen Company Culture

The culture of a company is imperative to its success. When employees like working for you, they do better work. One of the largest contributors to positive company culture is employee retention. For one thing, employee retention is an indicator that you probably have a strong company culture that values its people. One of many reasons employees leave jobs is due to toxic company culture. Other factors that influence people to leave their job include low pay, bad management, and lack of healthy boundaries. When employees stay they help build the parts of your culture that keep them around.

5. Develop Highly Skilled Employees

Any organization tries to hire the best talent they can. However, there are certain job skills and knowledge that can only come with years of experience on the job. With high employee retention, you get to keep and mold those talented employees into the best fit for their role and future roles they may hold within the company through professional development programs. 

6. Improved Company Reputation

When looking for new talent or even attempting to onboard new clients it’s natural for them to discuss the reputation of the organization they are about to work with. One of the most reliable sources for an organization’s reputation is former and current employees. This is also directly influenced by the overall culture of your company. Potential clients and employees may reach out to former and current employees or just interact with them outside of work. Either way, it’s easy for them to learn what a company is like from the ground level. With higher employee retention you can rest easy knowing these employees are going to promote working for your company. The last thing any company wants is to become the company with a reputation for a revolving door. 

7. Increased Productivity

Increased retention can have a great effect on the productivity of your employees. In a company where roles are constantly being filled, it creates a difficult environment to get anything done. All the time and effort is spent on bringing the newest person up to speed instead of focusing on the work that matters. Keeping employees around avoids this entirely. Additionally, employees that stick around for a while learn to align with the company goals and are more in touch with what needs to be done to achieve those. They care about the company and the work they do. This means they spend more time at work focusing on objectives that will help their work stand out and push the company forward. 

8. Better Morale

Morale is another way retention can have a direct impact on the culture of your company. In offices where roles are being constantly replaced, internal turmoil and confusion are likely to become the norm. Each time yet another employee leaves their position everyone around them is impacted negatively and begins considering what their next move might be if these sorts of scenarios persist. Focusing on retention fights against these problems. Employees get to know and understand each other and their roles, and employee relations improve. 

Employee retention is an important part of any business and has numerous benefits for each company and employee. To learn more about how employee retention and wellness are connected Talk with a Wellbeing Specialist today!

References:

• https://www.bls.gov/news.release/jolts.t04.htm 
• https://www.gallup.com/workplace/236051/real-value-getting-exit-interview-right.aspx 
• https://thoughtexchange.com/blog/benefits-of-employee-retention/ 
• https://www.forbes.com/sites/bryanrobinson/2022/05/03/discover-the-top-5-reasons-workers-want-to-quit-their-jobs/?sh=5125da7a5d46