Unless you’re a small business with one employee (yourself) or your business just opened yesterday, you’ve probably experienced employee turnover. And the larger your organization, the more frequently that turnover is likely to occur. It’s costly in more ways than one – inconvenience and lost productivity for starters, but there are also more direct financial implications.
For an average salaried employee, studies show it costs between 6 and 9 months’ salary every time a business replaces a team member. For a manager making $50,000 a year, that’s $25,000 to $37,500 just to fill their position, including the cost of advertising, interviewing and screening; onboarding/training; lost productivity; lost engagement and errors.
All of that makes keeping good employees just as important as hiring them, and understanding the factors that are most likely to cause them to quit is a good place to start. While there are contributors outside of an employer’s control (a spousal move or other life event occurs), the majority of reasons employees resign can be influenced by organization leadership. And believe it or not, it’s not always just about money.
Job Satisfaction & Career Advancement
In a recent study by the Work Institute, career development and work/life balance were among the top reasons employees gave for quitting their jobs, while compensation was listed in only 9% of exit interviews.* Poor management was also cited among the top reasons for jumping ship.
The 90-Day Job Flip
Around 40% of employees who quit their jobs in 2017 did so within 12 months of being hired – and about half of those workers left within 90 days.* Among those employees who left within the first year, compensation, work schedules and type of work were the top contributors.
What Employers Can Do
Ensuring your compensation and benefits packages are competitive in the market is an important step, but it’s not the only one and, possibly, not even the highest priority. In fact, 60% of Americans say they would take a job they love over a job they hate, even if the salary was 50% lower.**
Instead, focus your employee retention efforts on developing a better understanding of how your employees feel – what they want and need from their work. The best way to do that? Ask them. And not just once. Create a consistent pipeline for ongoing feedback from your employees. Internal perception studies provide a baseline to identify challenges, but regularly-scheduled employee surveys, comment boxes, one-on-one interviews and forums are just a few ways to continually measure growth, improvement and new challenges.
Leadership development also plays a key role, as does effective onboarding and training strategies. Most importantly, make sure your organization culture supports retaining team members, by offering resources and opportunities for both engagement, development and advancement. Here’s how BOLD Marketing can help with all of that:
*Work Institute, 2017