Which of the following is compromised when retaining workers?

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A moderate level of staff turnover can be good for a business; it means fresh ideas and approaches. However, every organisation needs to have a strategy in place to retain the high performers that give it a competitive edge; they are the ones you can’t afford to lose.

Ignoring high levels of employee turnover can be very costly; it lowers internal morale and it could harm an organisation's external reputation and cost it business. So, understanding the importance of staff retention is vital.

It's essential to try to learn more about the reasons why people resign. The reasons might simply be more attractive jobs elsewhere or chances for lifestyle reshapes, in which case it might be out of your hands to retain these employees. However, many people leave their jobs because they are dissatisfied with their current situation. There are ways of retaining these people, highlighted below.

Main reasons people leave a job

In our experience the most common negative reasons for leaving a job include the following.

• Poor salary and benefits.
• A lack of training and development opportunities.
• Dissatisfaction with management.
• Not getting along with colleagues.
• The journey to work.
• Lack of work/life balance.

 Methods to find out why staff are leaving

• Confidential attitude surveys.
• Questionnaires sent to former employees around six months after their departure.
• Exit interviews.

However, while companies do conduct 'exit' interviews to try and ascertain the reasons behind a departure, because of the necessity to obtain a decent reference, people often tone down or completely fabricate their reasons for leaving.

Ways to improve staff retention

By adopting a mix of the following methods, you should see an improved staff retention rate.

• Ensure those being recruited have a realistic idea of what the job entails.
• Improved career development opportunities.
• Effective appraisals.
• Strong diversity policies.
• A practicable means of dealing with bullying.
• A good work/life balance.
• A mechanism for staff to register dissatisfaction, whether it be appraisals, grievance proceeding and so on.
• Leadership training for managers.

Make your employees feel valued and proud of the work that they do, this will not only do wonders for your employer branding strategy, but will immediately improve your turnover rate. Develop a work culture that encourages diversity and creativity and put in place effective anti-discrimination policies that promote flexible working, where possible.

Adopting a strategy for staff retention is not always easy, but it will greatly benefit your organisation.

For more advice on the matter read Page Personnel’s other articles on employee development and retention.

Useful Links

Visit the Chartered Institute for Personal Development.

High turnover rates can negatively affect a company and its employees in many ways. With the constant need to hire and train new employees, it is easy to veer from true mission and vision of the organization. By retaining employees, companies can provide a higher caliber workforce that positively affects the bottom line. Businesses can lower turnover rates by providing adequate training, rewarding employees for a job well done and creating a company culture of trust.

Employee turnover has a direct impact on company revenue and profitability. For example, according to the "Organization Science" magazine, the estimated cost of a lost employee earning $8 per hour at a retail chain store is $3,500 to $25,000. Aspects contributing to this include hiring expenses, training labor, lost sales and productivity. Obviously, the revenue impact can be much higher depending on the industry, employee’s position and wage.

If a severance package is paid, this is an expense with no return on investment. Consider, also, management labor costs in placing classified ads, reviewing applications, interviewing and training. Although some companies utilize a job-placement service, this is still an expense. Additional expenses result from lost productivity or a lost customer base.

A high turnover rate can result in low employee moral. This may stem from overworked employees who have had increased workloads and responsibilities due to a lack of an active or trained workforce. New employees are not immune. They too may suffer from low morale as they struggle learning new job duties and procedures.

Continuation of this type of work environment can result in the company having a more difficult time attracting and keeping high-quality talent.

Lower productivity and sub-par quality of work can result from a disruption in daily operations due to an overall low number of employees or inexperienced employees without complete training. This is especially true in industries where repetition and comfort level play a larger role than innovation.

For instance, new hotel clerks may not provide top-tier customer service, as they are unfamiliar with the organization's policies. This could manifest in situations as trivial as providing refunds from broken snack dispensers. Although a seemingly small issue, there could be a sizable impact on customer satisfaction.

Even if marketing expenses remain consistent in efforts to attract new customers, the return on investment is lowered if the company is losing return customers and customer referrals due to inexperienced staff or lower-quality products. This increases the cost of a one-time customer, lowering marketing return on investment.