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Employee retention: the solution to labour shortage
According to the most recent Gallup Engagement Index, 1 in 5 employees in the UK does not feel tied to his company. Moreover, 90% of employees across Western Europe admit to being disengaged at work.
When this disconnect occurs, it amplifies the chances that your team members will begin to look elsewhere for work. It also costs your company a significant amount of money in lost productivity. In fact, Gallup estimates that disengaged employees also affect the economic powerhouse of Europe, Germany, costing the German economy up to 275 billion euros per year.
As Europe’s skilled workers shortage continues to gain coverage, business leaders are focusing on ways to keep their existing workforce secure and satisfied. One way to do so? Prioritize employee retention.
Let's take a look at how you can achieve this aim, even amid heightening competition and a restless workforce.
Keeping employees comfortable
Employee retention starts with making sure your employees feel comfortable and supported in their role. If they're insecure in the slightest about their future at your enterprise, it won't take long before they're changing companies.
How do you get there? Employee retention begins with listening to your workforce.
The Gallup results showed that most employees prefer to work in an agile environment. Companies that adopt this model tend to act quicker and are more open to new ideas. They're also more willing to embrace trending issues and technologies.
The only problem? Companies still struggle to adapt to this new model. To begin your transformation and improve your employee retention levels, there are a few steps you can put into place.
In your quest to boost employee retention, how often do you let your team members know how they're doing? When do you discuss what they're excelling and the areas in which they can improve?
If you're only sharing these insights at a quarterly discussion or annual review, you're leaving your teams in the dark for far too long. It won't take long before your employee retention rate begins to suffer.
Why? Your workers can't improve, sharpen their skills or correct an inefficiency that they don't know about.
Instead, strive to give more frequent feedback. You don't have to have one-on-one meetings every day, but make it a point to communicate on a regular basis. Employee retention levels will improve as they become better aware of what you need.
Once you onboard employees and get them set up in their respective roles, be willing to take a step back and let them take the reins.
They should feel empowered to make decisions in the field for which they were hired. This simple step speaks volumes, communicating to your subordinates that you trust them. In turn, it can increase employee retention, motivation and confidence.
Yet, the Gallup Engagement Index reveals that only one in three employees in Europe feels supported in this endeavour. Could autonomy be the missing linchpin in your employee retention program?
Improved information exchange
A team that communicates well across departments can't help but be strong and productive. On the other hand, the opposite also holds true.
According to Gallup, 40% of employees lack cohesion and collaboration among their colleagues. As a result, the work environment becomes self-sustaining, with everyone out to achieve their own goals rather than working toward a common one. No wonder employee retention levels suffer.
The result? Wires cross and multiple teams wind up working on the same topic without knowing it, rendering all the efforts inconsistent. To boost employee retention, provide your teams with the time and resources they need to meet and exchange information.
How free are your employees to try out an idea at work? If they do so and fail, will they receive a reprimand and stern warning? If your employee retention numbers are dragging, your mistake culture could be the culprit.
If you're unwilling to tolerate errors or inaccuracies, you'll suppress the talent that exists in your organisation. Over time, even your brightest employees will become unwilling or afraid to test a hypothesis. When this happens, you'll notice a dip in employee retention and those that do stay behind become less active in their roles.
The benefits of employee retention
With the labour shortage in effect, your company can't afford to spend time on lengthy and expensive hiring and onboarding processes. This is why it's important to prioritize employee retention.
When you're able to maintain your existing workforce and reduce your turnover rate, you're free to focus on more time-sensitive and mission-critical tasks. You can also turn your attention toward protecting and growing your bottom line.
In the United States, employee turnover costs the economy a staggering $160 billion per year. In many cases, it can cost up to two times an employee's annual salary to lose him or her and complete the hiring process again. If you needed another reason to focus on employee retention, the cost of a new hire is reason enough to grab your attention!
In the UK, a similar balance holds true.
Why are hiring costs so high? In addition to existing employee retention efforts, consider the myriad steps that business leaders must complete, including:
- Writing a job description
- Placing an advertisement in the job portals
- Reviewing applications
- Holding interviews
- Complete training
According to one study, it takes up to 52 days and $4,000 to fill a single position. Training costs alone comprise most of that. On average, they cost companies six to nine times an employee's monthly salary.
Employee retention begins with HR
If employee retention is your goal, it's time to rethink your HR strategy.
It's difficult to keep your employees satisfied and sticking around if you aren't managing their efforts the right way.
Managers in the HR sector require a comprehensive, managing HR online takes the guesswork out of workplace logistics. From inputting employee data to setting the office calendar, tracking time and organising documents, you need a solution that does it all.
That's where we come in.
Simplifying HR processes is easier said than done. Know how we get it done by starting your kiwiHR free trial!
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