The expression, you don’t know what you’ve got until it’s gone is all too true in employee retention. Far too often businesses don’t pay enough attention to individual employee satisfaction until a prized employee puts in their notice. Companies might scramble to offer the departing worker more money or change up their responsibilities, but by that point it’s almost always too late.
Valuing Employees as You Value Customers
It’s a curious problem for companies to be in, because most companies are well aware of the crucial importance of investing in customer retention. There’s an oft-repeated estimate that it costs about five times as much money to acquire a new customer than it does to keep an existing customer.
The same logic applies to employees. All else being equal—i.e., employee performance, job role, education, experience, etc.—it’s much more expensive to keep an existing employee than to recruit, hire, onboard and train a new one.
“The average company in the US spends about $4,000 to hire a new employee, taking up to 52 days to fill a position,” says Ryan Healy, President and Founder of Brazen. “Companies today are finding themselves engaged in an escalating ‘talent war’ that shows no signs of slowing in 2022, and their best defense is talent retention. Optionality around where to work, competitive pay and benefits and work/life balance have become bargaining chips that translate to employee satisfaction and reduced costly turnover for companies.”
Avoiding the Ripple Effect
Moreover, employee turnover has a ripple effect throughout the team and broader organization. For one, the mere fact that colleagues are quitting and finding better opportunities elsewhere almost always makes those left behind consider pursuing better options themselves.
On a more direct level, turnover places additional burden on the remaining staff. Even if a replacement is hired immediately, it takes time to get them up to speed, and the rest of the team is forced to not only help pick up the slack but also to spend time helping to train the new team member, even if only informally through answering questions throughout the day. It’s extremely difficult to quantify the financial cost of the ripple effect of turnover, but it’s certainly not nothing.
It’s important for companies to drive this point home for their managers: losing and replacing staff is costly; therefore, the organization needs to invest heavily in employee retention.
The post Think of Talent Retention Like You Think of Customer Retention appeared first on HR Daily Advisor.