Retention & Turnover: Stats & Solutions
Why should companies care about retention and turnover?
• 87% of HR Experts say employee retention is among the highest priorities
• Higher retention can multiply profits by 4x
• The loss of an employee costs 33% of their salary
• The cost to replace a trained employee can be over 200% of their salary
• 63% of CFOs say their turnover rate has increased in the last 3 years
• By 2030 the US will lose $430 billion annually due to low retention
Retention and Turnover are two rates that directly reflect the stability of a company, however, there are some differences we should discuss.
Retention is to Turnover as Consistency is to Fluctuation
Retention measures the employees who stay over a longer period of time (most commonly an annual period). This does not include new hires within that given period.
Turnover measures the employees who leave or are replaced over a shorter period of time (most commonly a monthly period). This measurement includes new hires.
According to research collected by Legal Jobs there are 30 troubling statistics revolving around Retention and Turnover. We're going to discuss the top 6 problematic statistics, their cause, and solutions to help companies retain their employees and hire the right candidates.
6 Troubling Stats
• 65% of employees think they can find a better position elsewhere
• 20% of turnover happens in the first 45 days of new hire
• 31% of employees have quit their job within the first 6 months
• In 2019 the national average turnover rate was 36.4%
• Companies with optional remote work have 25% lower turnover
• 93% of young professionals left their last employer voluntarily
Those are the effects, but what is the cause?
We can't help companies improve turnover without understanding WHY employees leave. Once we determine the underlying issue, we can work on a solution that will keep employees happy and companies stable.
The Cause of Rising Turnover
• Over 50% feel they would be able to find a better job within 6 months
• Only 25% feel connected to their company's mission
• 80% of employees report they'd look for another job after one really bad day at work
• 44% of employees would leave for a 20% raise with another company
• Burnout is responsible for at least 50% of the annual turnover
From these stats we can see that the biggest problem is high turnover. We’ve also learned that young professionals prioritize new challenges, purpose driven missions, ethical alignment, and overall happiness over longevity at one employer if an employer isn’t meeting those needs.
The incoming generations aren't settling for jobs that leave them unhappy and uninspired or feeling undervalued and overworked.
We're in a day and age where opportunities are all around us and with the help of the internet it's easier to locate those opportunities right at our fingertips. The fear of not finding something else or anxiety over starting over isn't keeping people in their jobs anymore. Attractive retirement and compensation packages aren't enough on their own.
With this in mind, companies must modify their policies, strategies, and work culture to meet those needs and prove their value to their people if they want to thrive with longevity.
So what Retention Strategies can we implement to minimize Turnover?
The Turnover Minimizer
Work Smarter Not Harder : To prevent burnout companies need to ensure they are not overworking their employees. This may mean lowering hours with an increase in hourly pay or keeping salary the same, making hours flexible and getting away from the miserable 9 to 5 schedule, providing optional remote work, and implementing more time-productivity effective tasks. It may also mean better work load distribution in order to avoid overloading anyone’s plate.
Increase Transparency : Transparency builds trust, sets the right expectations, and supports healthy communication. Being transparent with employees about company goals and decisions, as well as cultivating a work culture of transparency, is extremely helpful in cases of conflict and confusion. Research shows that making these changes can raise the retention rate up to 30%.
Welcome Home : 69% of employees are more likely to stay after a great onboarding experience. This may include warm welcomes that foster relationships, providing quality tools to help them succeed, creating a personalized goals list, providing a free lunch, etc. Go above and beyond to make them feel that this is their new home, not just another stepping stone.
E is for Everyone : When an onboarding process involves E-Learning it can increase retention by 60%. This gives employees more control over their own training process and allows users to rate and review the training process for feedback purposes. E-Learning also combines all forms of learning: It meets the needs of all learning types with auditory, visual, reading/writing, and kinesthetic/action learning. Lastly, it makes the process of training someone more of a residual process than an active one thus saving time and money on training.
Talent Network : 69% of employers say they have a hard time finding the talent they need. However, putting talent and skill over experience and degree qualifications can eliminate that candidate shortage. Thinking of your organization as if it were a talent network and assigning employees to new teams when their talent is needed diversifies their skill, builds more relationships, keeps things innovative, presents new challenges, and provides new experiences. This may even make them feel more valued and confident.
A Culture That Thrives Together Stays Together : This is where Grow Dialogue can add value to your company! Put your people’s needs first and your work culture will flourish. Investing in your team’s personal development and tools for healthy communication, collaboration, and inclusive decision making will lead to a thriving team culture that drives employee happiness.
