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I don’t understand why companies don’t do more to retain talented employees. According to Gallup, the expense of replacing an employee can vary significantly, spanning from one-half to two times the employee's annual salary. This range accounts for various factors contributing to turnover costs, such as recruitment expenses, training costs, lost productivity during the transition period, and potential impacts on team morale and productivity. That is a lot of money to walk out your door all because you did a lousy job making them want to stay.
Question #1: What is your employee turnover rate? Question #2: How does that number compare to your industry averages? Question #3: If it is higher, why? Try wrapping your mind around these statistics: 57% of employees leave their jobs because of their boss, and 82% leave because of lack of recognition. Those are horrific statistics.
If you want to stop the bleeding of employees leaving, then try this: be known as the best paying company in your industry, so all the top talent will want to work for your company. To reduce your training budget by retaining your employees rather than have to train new ones, you will need to eliminate micromanagement and create a culture where employees have a hand in decisions and policies. Additionally, everyone will be recognized for contributions and understand their track for advancement. Last, but certainly not least, you must be fair. This is one-hell-of-a-paragraph. Can you say all of these things about your management style and company? If the answer is “No,” then you’ve got some work to do.
By prioritizing employee retention efforts and creating an environment where top talent feels valued, supported, and motivated, companies can mitigate turnover and maintain a high-performing workforce. Let me show you just the opposite in a real-life story.
I have a dear friend whose son works for a company of about 1,500 employees. He has been there for five years and gone through extensive training. He is highly respected by his peers and exceeds all his measured metrics. He has excellent soft skills: excellent communication skills, a great team player, strong problem-solving skills, flexibility, organization, leadership abilities, emotional intelligence, creativity, attention to detail, and adaptability.
This young man has made up his mind to leave because of poor pay, a poor boss, lack of recognition, and their inability to give his career any direction. He is stuck in a job that is far below his skills, intelligence, and educational background. He was willing to put in the time to prove himself, and he did. He knows their products, services, policies and procedures sidewise. HE HAS EXCELLED, and he is now leaving.
Their HR department (and senior management) is busy hiring new people and not paying attention to the employees they already have. I spoke to this young man for several hours, and I was extremely impressed with him. A major talent is getting ready to walk out their doors, and they will be clueless as to why.
What have you done lately to find out what is REALLY going on in the minds of your employees? What have you done to show concern about their job? What steps have you taken to improve their situation? Don’t assume that everything is okay because no one is saying anything. A problem that is left to fester can cause you to lose talented employees, all because you didn’t ask.
There are companies out there who aren’t willing to give employees a pay raise to keep up with inflation but end up paying one-half to two times the employee's annual salary to replace them. THAT IS JUST PLAIN STUPID.