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3 years ago · by · 0 comments

Employee Retention

It costs nearly 20 percent of an employee’s annual salary to replace a current employee. If you are experiencing high turnover, chances are you are experiencing high losses as well. The costs of reviewing applications, processing candidates, conducting interviews, training and purchasing equipment for new hires aren’t only monetary – they also cost time and lost productivity.

Given the high cost of losing an employee, retention should be a top priority for every organization. If you do not already have a retention strategy, now is the time to make one. The first step in curbing turnover is figuring out why employees are leaving.

Why Employees Leave

Employees leave organizations for a variety of reasons, depending on their unique circumstances. However, there are some common reasons that may help determine the best retention strategy for your organization. Below are some of the most common reasons employees leave:

  • Stagnation – Employees are often looking for career and personal growth. If they have no upward mobility at your company, they may look for it elsewhere.
  • Pay – Compensation needs to be competitive to attract the best talent. Likewise, good pay is needed to retain top talent.
  • Workplace culture – Expectedly, co-workers matter to employees. If they feel ostracized or marginalized by co-workers (or management), they will want to leave that environment.
  • Better opportunities – Like with stagnation, employees leave when they believe they have better prospects elsewhere. This could be due to a higher-paying position or simply a job more aligned with their interests.

How to Retain Employees

Retention strategies are not universal. It is possible that techniques and strategies that work for some organizations will not work for yours. This means you need to analyze why your employees are leaving and strategize how to combat those reasons.

Exit interviews are a great way to analyze why employees are leaving. During exit interviews, managers ask questions to employees who are on their way out of the company. Questions should be related to the employees’ time with the company, such as what they enjoyed, what they disliked and what prompted their resignation. Exit interviews will only be useful with employees who resign or leave voluntarily, not those who have been terminated.

Depending on the responses from the exit interviews, you can begin crafting a retention strategy. For instance, if a main catalyst for employee turnover is a lack of upward mobility, think about how to change that. It could mean creating new roles or, if roles already exist, making a clear guide for career pathing at the organization.

Creating a retention strategy does not need to be solely reactive. Consider creating a survey to gauge employee satisfaction with the company. Include questions about what people like and what they do not like about their job.
Retaining employees is critical for any business an falling short on retention can be devesating to your bottom line. It costs nearly 20 percent of an annual salary to replace an employee, so implementing proactive retention straties is key to mainitning your workforce.

Answer the questions below to determine if your orginzation has a high turnover risk.

INSTRUCTIONS: Begin by answering the questions below. Each response will be given a numerical value depending on the answer. After completeing the questions, total your score using the scale at the bottom of the page.
YES: 0 points NO: 2 points UNSURE: 2 points
QUESTION ANSWER SCORE
Have you reviewed pay scales within the last three years?    
Do you survey employees career groth desires each year?    
Have you compared your health insurance against similar companies in your industry?    
Do you routinely survey employees to ensure they feel comfortable and included in the workplace environment?    
Do you track top employee performers?    
Do you monitor the market to ensure top performers are appropriately compensated?    
Have you surveyed employees in the past to guage their workplace satisfaction?    
Do you have a retention strategy in place for when a top performer comes to you with another offer?    
Do you offer incentives beyone health benefits to employees?    
Have you implemented employee engagement strategies to curb turnover proactively?    
TOTAL SCORE:    
Low Risk Moderate Risk High Risk
0 – 6 7 – 13 14 – 20

There is no hard and fast rule for successful employee retention. Creating a retention strategy for your organization requires you to analyze both your company and its industry. Contact Scurich Insurance for more information on retention and for materials to help you craft your strategy.

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Scurich Insurance Services
Phone: (831) 661-5697
Fax: (831) 661-5741

Physical:
783 Rio Del Mar Blvd., Suite7,
Aptos, Ca 95003-4700

Mailing:
PO Box 1170
Watsonville, CA 95077-1170

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(831) 661-5697

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