The True Value of Employee Retention

In today’s competitive marketplace, employee retention is a critical factor in the performance of any business, and the loss of a key employee can have a dramatic impact on the company’s success.

Not only do businesses lose intellectual capacity and corporate knowledge when employees leave, but, if not managed carefully, the repercussions of employee turnover can adversely affect morale, customer relationships and your corporate brand or image.

Staff turnover is expensive, in addition to the obvious costs, such as termination/resignation, hiring, recruitment and training costs, there are many indirect or hidden costs associated with losing a key staff member, these include:

• Loss of intellectual property
• Loss of corporate knowledge
• Damage to the corporate brand
• Lost business opportunities
• Disharmony amongst employees
• Negative impacts on customer relationships

But how does this affect the bottom line? I have estimated staff turnover costs range between 0.5 and 2.5 times an employee’s annual salary.

Employee retention is ultimately about how an organisation manages its relationship with its most valuable asset – their people. Whilst employee turnover is a complex problem involving many factors, there are a few common rules every business should consider:

• promoting a culture of engagement and learning
• investing in your people and showing them you care by committing to their development and success through training and coaching
• promoting a work-life balance and offering flexibility in working conditions
• providing meaningful work and a culture that promotes a sense of belonging
• managing retention as a business ‘metric’, making leaders accountable for retention
• building a brand that motivates and inspires your people.

The benefits of implementing these strategies to retain your key staff are lasting, and include:

• increased job satisfaction, motivation and performance
• reduced workplace stress and anxiety
• more satisfied customers
• higher staff engagement and productivity.

The bottom line…

In business your people are your most important asset, and letting good employees slip through your fingers can cost you more than lost time and inconvenience.

About the author:

Ian McCully is the State Manager of Nicstar Global and has been involved within the ICT industry for over 30 years. Ian has held senior management positions within both large corporate and government organisations. He is strongly focused on customer service and understands the value of a cohesive team approach when it comes to delivering successful outcomes for all.