In recent years, the workplace has seen unprecedented changes. Employee retention is something companies desire; however, it can be easy to forget that employees are at the center of organizational success and that how they feel about the companies they work for, leadership, teams, and their performance at work can help a company to soar or can cause it to drown. According to the Bureau of Labor Statistics, the unemployment rate is nearly 4%, a sign of a healthy job market. So, how can companies prioritize employee retention to help other aspects of business flourish?
It is important to note what can happen if an employee is not retained. There are justified reasons for letting an employee go and justified reasons for an employee to leave on their terms. However, when turnover becomes a habit, and when companies find themselves replacing employees too frequently, some detrimental effects can occur.
The Escalating Cost of Replacing Employees
As mentioned in J2T's article: "5 Best Practices for Developing a Team to Support a Growing Organization," employee replacement costs can be as high as 50%-60%, with overall costs ranging anywhere from 90%-200% for a single employee.
Fortunately, an unemployment rate of 4% means that most people are employed. For the past several months, the number of job openings and job resignations have been on a downward trend, but does this mean employees are happy at work? When considering finance and accounting specifically, most employers state that they face significant challenges in finding skilled candidates available for hire. This is not surprising, especially in industries where unemployment rates for in-demand roles typically fall even below the national average.
Working with a recruitment agency specializing in accounting and finance, such as J2T, can lead to a much simpler, quicker, and stress-free process. Read our recent article on "Scaling Teams Effectively - How J2T Can Help" for more information on how our team can help your team grow. It is critical in today's environment to focus on how to hire the right people and successfully retain them.
The Benefits of Employee Retention
- Increased employee loyalty: When employees feel valued and supported, they may feel more allegiant to the company's overall goals and mission.
- Creates a skilled workforce: When an employee stays at a company for an extended period, they can build their skill set and relevant experience versus having mostly new employees who need to be trained on how the company operates.
- Customer relationship management: Clients notice when companies have high turnover rates. Whether you are B2B or B2C, introducing clients and customers to a new rep every few months has a detrimental effect on the company's reputation. Building relationships is at the core of many companies, and keeping employees around to foster relationships is critical.
Top Strategies for Employee Retention
Earlier this year, Forbes presented effective employee retention strategies worth noting.
Offer competitive base salaries or hourly wages:
This is no big shocker; people want to be paid fairly for their work. Compensation can include pay, benefits, and other things that matter to employees. Not all companies are in the financial position to hand out raises like candy, but offering more flexibility, such as more remote-office days in a hybrid model or reduced hours on Fridays, is a great place to start that does not directly affect the company financially but still makes an employee feel valued and rewarded.
Recognition and reward:
Unfortunately, over 80% of American employees say they do not feel recognized or rewarded . Prioritizing recognition and reward is mutually beneficial as it can be implemented in impactful ways. Teams can vote on who deserves recognition for the week and managers can be involved in announcing rewards. Getting everyone involved in the reward/recognition process is a low-cost-high-reward strategy for improving retention.
Happy employees are less likely to leave the company they work for. A Gallup report on employee burnout found that 76% of employees sometimes experience burnout on the job, and 28% share that they feel burnout "often" or "always." It is easy to blame burnout on overwork and try to solve the issue with extra days off or other time away from the office, but the problem is deeper than that.
The study found that burnout is more influenced by how employees experience their workload rather than the number of hours they work. Five factors that lead to burnout include:
- Unfair treatment at work
- Unmanageable workload
- Unclear communication from management
- Lack of manager support
- Unreasonable time pressure
In today's dynamic job market, employee retention is your secret weapon. High turnover is expensive and disrupts your team's harmony and client relations. Specialized recruitment agencies, such as J2T, can help lay the right foundation to increase employee retention because of attention to competitive compensation, tips on how to address burnout, and other tools to ensure a committed team for long-term success.