Employee turnover can be a huge pain in the ass. It’s not just the time and effort it takes to hire and train new employees—it’s also the impact on your business efficiency and its bottom line. Not to mention, the less acknowledged impact it has on the team and culture, which can be truly devastating to the environment.
Already in 2022, the overall cost of voluntary employee turnover has cost more than $1 trillion. The longer you can retain an employee with your organization, the more value they bring to your team and the higher their impact on your bottom line. By retaining a satisfied employee within your company, you save yourself about two times the amount of that employee’s salary. Because, that’s about how much you would spend to rehire for the open position they leave.
A new survey has shown that 40% of U.S. workers are considering quitting their jobs, due to these top reasons: ‘
- Low pay
- Failure to promote or no growth opportunities
- Feeling disrespected
And, this trend isn’t slowing down.
Many employees now hold companies accountable, and if they feel like the company isn’t as invested in them as workers as the company expects the employees to be in their actual work, they’ll find another company that better aligns with their wants and needs.
This increased rate of turnover is known as, what we’ve all become familiar with, the “Great Resignation” or “The Great Reshuffle”.
According to Pew Research data, workers who have left their workplace in the previous year are now employed elsewhere, earning more money, gaining more advancement opportunities, and having a better work-life balance. Generally, job shifters feel more positively about their current job than they did about their previous one.
This proves further that finding the right candidate for open positions within your company and retaining valuable employees is in any company’s best interest.
You may be thinking, “I have already implemented virtual team events and feel like I allow my employees to have a flexible schedule. What more can I do?” Our VP of People, Julia Kimmel, recently sat down with GirlBoss to discuss how RocketReach has retained its employees during the Great Reshuffle. And we’re here to give you even more inside employee retention secrets below.
Why an IDGAF Attitude Should Never Apply to Employee Retention
We’ve already established employee turnover is expensive for many businesses. But have you truly given thought as to why?
When onboarding a new employee, your company, HR team, and hiring managers spend time and money on:
- Candidate recruiting
- Job boards
- Interview time and coordination
- Employment negotiations
- New hire training
- And more
When an employee leaves, your team’s productivity doesn’t only decrease but the environment and culture feel the impact negatively. Some amount of turnover is inevitable, but it’s still possible to grow a productive business while keeping your team members with the company for a long time.
To keep your employees around, you’ll need to nurture a healthy work environment and invest in their personal development. Satisfied employees will be less likely to jump ship, which will allow everyone to focus on expanding the business instead of putting out fires and trying to fill open positions.
After all, developing your workers’ skills means they’ll be far more valuable to you now and in the future. According to our own job change research and Harvard Business Review, employees are now looking for company cultures that provide:
- Flexible work environments, including hybrid and remote workspaces
- Healthy work/life balance
- A significant increase in income or benefits, including retirement, health insurance, and parental leave benefits
- Leadership that avoids micromanagement and allows their employees to do their best work
- Job security and stability
- A diverse and inclusive workforce
When you spend time transitioning your company culture to a people-first perspective and genuinely care for employee workplace health and wellbeing, the positive impacts on your company are visible.
Money Doesn’t Grow on Trees and Neither Do Qualified Candidates
In the US, companies spend 50 to 60% of an employee’s annual salary on replacing them, while SHRM estimates that turnover costs associated with individuals can be between 90 and 200% of their yearly salary. It takes time for human capital to become productive, and turnover makes that process more costly.
Hiring expenses are another factor to consider. After all, the average cost of hiring an employee is around $4,000, according to a Glassdoor study. These costs can increase further if you don’t have efficient candidate recruiting tools in your toolbox.
Also, various factors could impact that number, such as the size and location of your business, the role you’re hiring for, and the industry in which you operate.
For example: if you’re looking to hire a higher-level executive, it’s going to cost more than if you’re looking to hire a web developer. If you’re looking to hire someone in California or New York City—where the cost of living is higher—it’s going to cost more than if you’re looking to hire someone in Alabama or Ohio—where living costs are lower.
Once you find a candidate whose experience fills the requirements of your open position and whose personality and characteristics are a good cultural fit for your organization, you do what you can to bring them onto the team and keep them engaged, challenged, and growing.
Time Directly Equals Money
The longevity of the working relationship only benefits the organization’s efficiency and the employee’s growth and learning.
It’s no secret that tenured employees are more productive and engaged than new hires. But why is that? Studies have shown that long-term employees have had time to develop their abilities, can accomplish tasks within a shorter time, and are more committed to the business’s success. This clearly means you can increase productivity by having more tenured employees in your workforce. Research also shows that when you focus on engagement and retention, employees notice it, leading to increased productivity and better work quality. It also drives employees to consider positional growth, moving from coordinators to being key company decision markers.
According to CED Magazine, 7 out of 10 employees say training and development opportunities influence their decision to stay with a company.
If your people feel disengaged, most of them would rather be elsewhere than at work. They don’t feel like they’re being challenged or getting any personal development or training. They don’t see a future for themselves at the company, so they don’t think about how to improve themselves to get a promotion or move up.
If you want your employees to be engaged, you must make them feel they matter. Ensure that they have growth and development opportunities and that their career path with your business isn’t just a dead end. This means creating a career pathing framework that supports the growth of the team.
Does Your Employee Retention Suck? Here’s How to Improve It
Keeping your employees happy isn’t that complicated. At the end of that day, we are all people looking to feel we have a purpose, are recognized, and make an impact. Maybe at your company, a decision maker’s salary is large enough to keep an employee patient with many tasks that would cause lesser-paid employees to quit. Take a step back and think about an entry-level salary within your company. When considering your company culture and benefits from that point of view, would you continue to work at your company as well?
If not, here are some employee-retention-boosting techniques that should be implemented sooner rather than later:
- Create a supportive, growth-oriented culture. Genuinely give your employees a voice, and encourage them to use it. The goal is for every employee to feel like they are part of something bigger than themselves. Strive to create a safe environment where employees can be themselves and succeed together.
- Provide a well-defined career pathing framework. A well-defined career path motivates your employees and maps out growth, development, and learning opportunities. A framework can help your team identify the specific skills they need to develop, and which learning opportunities they want to seek out. Showing you’re invested in their development speaks volumes about their importance in your organization.
- Ensure clear communication with employees (i.e., feedback, specific job roles, and work expectations). Communication is the key to any successful relationship. It’s essential to keep your employees in the loop about what’s going on at your company, how they can improve their performance, develop new skills, and what mentorship opportunities may be available to them.
- Foster a human-first work environment. It’s vital to value vacations, recharging, training, and asking employees what learning they actually want. We’re all humans. We need to recharge, we need to train our brains, and we need to have the space to make mistakes and learn. You can’t do any of those things if you’re working all the time—so don’t make your employees do it! Promote a human-first culture that supports people who silence their emails when they’re out of the office. Empower them to go off the grid and truly unplug. They’ll come back hungry to learn and dive back into their work.
- Keep good humans. Encourage a supportive community by maintaining genuine and compassionate good humans within the company. Hire good humans that align with your company values. These people want to be there and know why they’re there: they want to help other people and celebrate the wins of people around them. Be intentional about maintaining your employees’ connections with each other and assure everyone knows how much their contribution matters.
Tried and Proven Employee Retention Practices We Should All ✨Aspire ✨ to Adopt
I hear you already saying, “That’s all fine and dandy, but do companies actually implement the changes you mentioned?”
Heck yeah, they do, and they do it well.
Clearly, while increased quitting rates signal economic recovery, businesses are now desperately trying to figure out how to retain employees, continue to make them feel valued, and stay competitive in the booming job market.
Surprisingly, many companies aren’t changing their company cultures to match current job seekers’ wants and needs. The ones that do are thriving by promoting relevant employee rewards and benefits. Find out what these companies do to keep their employee retention rate healthy.
- MassMutual – Massachusetts Mutual Life Insurance Company or MassMutual announced a new program for employees in 2022 that will allow them to convert up to 5 days of unused vacation time into either a payment toward student loan debt or a contribution to a 529 college savings account. This is a great program considering that 65% of college-educated adults are in student debt.
- Patagonia – Patagonia cares about its employees so much that it’ll pay for them to take time off to climb a mountain or pitch a tent in the wilderness. Employees get a sense of accomplishment even outside work with their work-life balance focus, shared values towards activism and volunteerism, paid sabbaticals, and support for working parents through on-site child care.
- Clif Bar – Sometimes a menial pay rise or promotion isn’t enough. CEO Gary Erikson and his wife Kit Crawford decided to offer their companies up for employee ownership in 2000. With Clif Bar, the formula People>Businesses>Brands>Community>Planet works. They have a 97% employee retention rate, and many attributes that to its five core company values.
- Whole Foods – CEO John Mackey was frustrated with the social requirement that employees are expected to look clean-cut. Whole Foods notoriously has one of the best employee retention rates in the industry. Many of the employees at Whole Foods have visible tattoos or dress in bohemian and alternative styles. This company is famous for having one of the best retention rates in the industry. A case study found that “employees that are encouraged to display self-expression and identity comfortably” is a significant factor in maintaining a high retention rate.
- RocketReach – Our company has a “No Assholes” policy. We have a humans-first company culture and transparent two-to-three-year growth plan established early on in our employees’ careers. For us, being a “good human” in the workplace means valuing each other from an entry-level to executive suite-level position.
“We need someone to have the hard skill-set to do the job they’re interviewing for, but who you are as a human matters even more to us. We prioritize candidates who are down to earth, have strong backgrounds but an incredibly low-ego, and possess a genuine curiosity and desire to learn and grow.” – Julia Kimmel, RocketReach VP of People
Find Qualified Candidates that Match Your Company Culture
RocketReach has a team of remote-first data lovers that are an incredibly connected, tight crew. That’s why it’s no surprise that our company got 4.9 stars on Glassdoor and 100% CEO approval. We’ve found recruitment and employee retention tactics that significantly work for us.
However, we have an unfair advantage. Our contact database helps us attract, engage, recruit, and retain the best talent. Luckily, it can help you too.
Our platform compiles various resources to help hiring managers and candidates find what they need within the world’s largest and most accurate database of decision-maker contacts—all at your fingertips. Every connection is a first-degree connection at RocketReach.
You want to be efficient and can’t afford to waste time. Get ahead of other company recruiting efforts with industry-leading technology that helps you get closer to the people who matter most before the competition does. Start your free trial, by exploring our RocketReach contact database today.