A strong employee retention and engagement strategy is no longer just a nice-to-have luxury. It is a necessity if you hope for your business to survive.
According to a recent study, there will be a massive global talent shortage of approximately 85 million people that only promises to worsen over the next decade. If left unchecked, this shortage threatens to reduce global revenues by about $8.5 trillion. Korn Ferry suggests organizations devise and implement strategies to increase employee satisfaction and reduce workplace turnover before it’s too late. If you have yet to invest in an employee retention strategy, now is the time to do so. Continue reading to find out why this investment is significant on an organizational level. You can accomplish this tall task in the most seamless and cost-effective manner possible, and we’ll tell you how.
The High Cost of Employee Churn
According to Gallup, employee turnover costs U.S. businesses $1 trillion each year. You read that right. The cost to replace a single employee is approximately one-and-a-half to two times his or her salary, and that’s on the conservative end. Recruiting costs and fees alone account for 20% to 30% of the total cost to replace an employee. Throw in ad spend, sifting through applications, hosting interviews, pre-employment screenings, possible relocation, and loss of productivity during the hiring process, and it is easy to see how the cost to replace a single individual can amount to $100,000 or more.
None of this takes into account the time it takes to onboard and train new hires, the reduction in employee morale, and other hidden expenses associated with employee churn. Seeing how one in three new hires will leave a company within two years, it becomes easier to understand how employee turnover kills small businesses.
Employee Turnover Is a Fixable Problem
The good news is that employee turnover is a very fixable problem. While many leaders have accepted that employee churn is a natural part of business, Gallup assures you that it is not. Per its findings, 52% of people who voluntarily left an organization said management could have prevented them from doing so. In fact, according to the data, convincing workers to stay may be as simple as inquiring about their job satisfaction. Per the numbers, 51% of individuals who voluntarily left their positions said that, in their last three months with an organization, neither a leader or member of upper management spoke with them about job satisfaction or their futures with the company.
Top Drivers of Employee Retention
The best way to reduce workplace turnover is to prioritize increasing employee satisfaction. As the data indicates, though, that is easier said than done. Before you begin panic strategizing ways to keep your top talent, consider the top factors that affect job satisfaction and employee happiness:
- Effective Onboarding: Taking proactive measures to introduce new hires to their new teammates and roles immediately upon hiring can boost their perception of your company and its culture in their minds.
- Positive Workplace Culture: 8% of survey respondents said that strong relationships between other coworkers and management contribute to their desire to stay with an organization. Strong values and purpose are also key drivers of retention.
- Strong Benefits Package: Based on one survey, 92% of workers said that the benefits package is important to their job satisfaction. Nearly one-third of respondents said they would stay with a company that offers good benefits, and 29% said they would switch companies for better benefits.
- Employee Recognition: Per the data, 63% of employees said they feel as if they do not receive enough praise. What is startling about this is that the same study suggests that the number one reason people leave their jobs is because of feeling undervalued and underappreciated. Of survey respondents, 83% said they would rather receive praise than gifts.
- Communication and Collaboration: A 2018 study found that 33% of employees said they were ready to quit their jobs because of ineffective communication, which leaves them ill-informed, confused and anxious.
You may look at this list of problems and wonder how you can overcome each without losing even more money. The answer is simple: an intranet.
The Power of the Intranet
An intranet — which is a private internal network used exclusively by members of your organization to share, communicate, and collaborate — can help you overcome the aforementioned challenges and then some. With an intranet solution like hubley, you can increase employee engagement and enhance company culture through a single pane of glass. From enabling you to introduce new hires with a single click to easily spotlighting outstanding employees to drastically improving internal communication and collaboration, hubley is a powerful tool that takes the guesswork out of employee engagement and retention. To see how hubley can help you engage your employees for success, request a demo today.