The long-term success of any business involves being able to retain key employees. It is through these employees that businesses are able to improve customer satisfaction, increase customer loyalty, and cultivate a work culture that enhances the overall structure of the organizations. It is important to note that a survey conducted found that in the year 2013, 40 percent of employees who left their jobs on a voluntary basis did so within the first six months of their employment. And even more astonishing is that for a worker who makes only $8/hour, the replacement cost is about $5,500. In fact, the average cost of hiring a new employee is around $7,000 and this does not include training.
So, the question is, “how do you go about retaining your employees?”
Employee retention is largely affected by supervision. When poor supervision is carried out, employee turnover rates tend to be higher. When proper supervision is implemented, however, retention rates are increased. Proper supervision involves making it clear to employees what is expected of them. And if a supervisor makes an employee feel undervalued, this often causes the employee to take his skillset elsewhere.
Another factor that affects employee retention is fairness perception. When employees feel as if they are being treated fairly, this leads to their loyalty toward the companies they are working for. It is critical to follow strict guidelines when handing out promotions and pay raises to employees. When workers see for themselves that pay increases are being handed out in an unfair way, this will quickly lead to their dissatisfaction. For example, if an employee has worked for your company for three years and has received only one pay raise while another employee of six months has already received two pay raises, this will be viewed as unfairness. You want to avoid this because it can cause those who view themselves as being treated unfairly to walk away from their positions and find employment elsewhere.
Employees want to feel secure in their employment. If you leak news that layoffs may be looming ahead, this can cause employees to become nervous and look for employment elsewhere. This is why you should never leak information that causes employees to feel threatened by a loss of their jobs. Sure, you don’t want to drop the bomb in a single day that a layoff is occurring, but you don’t want the information leaking months in advance either. This kind of information needs to be released in a predetermined manner.