According to a research by Gallup, 60% of millennial are open to a job opportunity at any given point in time. Millennial are notorious for being job hoppers but one cannot blame them as they are always being lured by companies with better salaries, perks, benefits, promises of a better work life balance and what not? This is an age of cut throat competition and organizations want the best talent to work for them. This alone is a reason important enough to have a solid employee retention strategy in place and that’s what we are going to talk about in this post.
If you are a company eyeing the best talent in the talent market, then employer branding should be a high priority task for you. Having a reputable employer brand is also important as it helps reduce the hiring and marketing costs, & improve productivity. Companies like Google, Facebook and Apple invariably end up getting the best talent, not because they are offering the best salaries. There are many other organizations that offer competitive pay packages. The difference lies in the brand value that these companies offer to their prospective employees. It’s their brand value that tempts the best candidates to apply and get a job in these organizations. The next question you must be asking is “as an HR what is the importance employer branding?”
Recruiting teams work hard to get the right talent onboard. Recruitment process by its inherent nature is time-consuming and expensive. It takes a considerable time to create job descriptions, go through interviews, assessments, background verifications etc and efforts from multiple stakeholders. Then finally the candidate is hired and further time and efforts are spent to onboard the candidate. But at the end, if the employees don’t stick at the company and moves out at the first opportunity than that is certainly a problem. Know what is employee retention and why it is important for organizations.
What is Employee Retention?
Employee retention is a collective term for policies and strategies to ensure employees do not leave the organization within a short period of joining. In simple words, it’s an organization’s ability to make employees stick around for a longer period of time. The retention rate is represented in the form of %. A higher retention rate is generally favorable as more employees leaving the organization lead to higher hiring costs and loss of productivity.
Why is Employee Retention Crucial for an Organization?
Successful businesses with proud history will often tell you one same thing: their employees are their biggest assets. Companies that take their employees for granted thinking that even the best workers can be replaced often settle for mediocrity. Great businesses understand the importance of holding on to their loyal, high performing employees.They always keep their employees first, listen to and fulfill their needs in order to make them feel valued and motivated. They implement various employee retention strategies to reduce employee turnover because they believe in their people and consider them as the greatest asset. In doing so, they are avoiding many other complications such as:
- Low Turnover Cost Is One of the Benefits of Retaining Employees
- Knowledge Loss is Why Employee Retention Matters
- Better Teamwork is One of the Advantages of Retaining Employees
- Outgoing Employees Poaching Customers is why employee retention is important
Low Turnover Cost Is One of the Benefits of Retaining Employees
Hiring is no easy task, and definitely not cheap. It takes days, sometimes weeks of a recruiter’s productive hours to hire a candidate. There is a cost to advertising the job on different platforms. It involves the valuable time of many stakeholders such as the hiring manager, interviewers, and team leaders. As per Wall Street Journal, it can cost twice the employee’s salary to find and train a replacement. This doesn’t even factor the loss of revenue in terms of productivity loss as the position you need to fill is now empty without anyone dedicatedly doing that work. If employee retention is a serious problem, this loss will have a compounding effect on the business bottomline.
(Also Read: Why Employee Engagement is Important?)
Knowledge Loss is Why Employee Retention Matters
You hired a top talent, trained them and now instead of working to your benefit, they are working for your competitor. How bad that loss is? Not only did you wasted money and time in hiring that candidate but you also lost a lot in terms of the value and knowledge that they could have brought to the table. If your best employees start leaving you to work for competitors, it would soon result in a pitiable condition for the business.
Better Teamwork is One of the Advantages of Retaining Employees
Even if the business gets lucky second time and hires a better replacement, it will be anything between one to three months before that new hire is able to settle in the company. There is still no guarantee that the replacement will be able to build the same camaraderie as the previous employee had with other team members which again, could be an issue considering how important team work is for completing deadlines and achieving objectives. Companies that have better work relationships within their employees often do well as the team members will be quicker to help each other and support in times of need.
Outgoing Employees Poaching Customers is why employee retention is important
Sales professionals often have deep, loyal relationships with customers. In fact, in many organizations the sales guy is the only person a customer will trust. Also, every salesperson has his list of “pet clients”, i.e customers who will renew their subscription just by taking their word for it. Other than sales people also, if a customer regularly deals with an employee and suddenly that person is gone, it may put that customer’s loyalty at risk. While there are many cases of ex-employees poaching clients for their new employer, which is ethically wrong, even a customer will not be comfortable dealing with new representatives every now and then. Some do understand that employees move from company to company for career growth, but if such behavior becomes an everyday occurrence it will raise question over company’s policies.
There are other reasons also why your company should pay attention to employee retention such as wastage of resources in training replacements, and loss of employer branding. Therefore, recruiters must work on developing employee retention strategies right from the very beginning of their recruitment strategy instead of waiting for a contingency.
NAUKRI RMS ADVANTAGE
ABOUT NAUKRI RMS
“Naukri RMS is the Enterprise Cloud Business division of Naukri.com. Since its inception, Naukri RMS has developed a bouquet of customized recruitment solutions addressing needs of different market segments. Naukri RMS intends to evolve recruitment into more productive and efficient process through automation of the entire recruiter workflow, right from requisition to offer. It aims to become India’s largest one stop recruitment platform. “