Employee Retention Mistakes Can Be Avoided
Employee retention mistakes are costly. Unfortunately, our employee engagement survey research shows that companies continue to struggle with the attrition of top and high potential talent. While companies are getting better at understanding what drives higher levels of employee engagement, many leaders still struggle to truly understand why people leave and to quantify the impact employee turnover has on their business.
The Cost of Employee Turnover is Probably Higher than You Think
Of the multitude of people functions in each organization, turnover is by far the most costly because of its harmful effect on revenue, profits, morale and customers. For every employee that leaves, you should figure twice the loss of their salary plus the loss of productivity as you recruit, hire and train replacements. And this doesn’t even take into account the loss of key employees who were high performers in critical jobs or on major customer accounts.
5 Employee Retention Mistakes to Avoid and What to Do Instead
Leaders need to take a more careful look at what they can do to retain top talent and increase employee engagement. Here are the top five employee retention mistakes followed by effective solutions:
1. Lack of a More Comprehensive Employee Turnover Metric
First leaders need to understand and quantify the extent of the current turnover situation. Most companies simply report turnover in terms of a percentage of the employees who leave. But reporting this number alone, even if it includes voluntary and involuntary attrition breakdowns hides what you really need to know.
A better approach is to gather and report employee retention data based upon your talent management strategy in a way that provides valuable business insights. For example:
You get the idea. Start with your talent management strategy and then measure and report on what matters most.
2. The True Reasons Employees Leave Are Not Well Understood
In-house employee exit interviews are not historically a reliable source of information on why employees really leave. We know a low percentage of employees complete employee exit surveys. We also know that an even lower percentage provide candid feedback.
How can leaders expect to decrease unwanted turnover if they fail to fully understand why key employees leave and what to do about it. The employee who is on the way out has little incentive to tell the real reason for their departure…they need a good reference and don’t want to burn bridges.
A better approach is to conduct social-based employee exit surveys to gather engagement retention feedback from both exiting employees and their peers. This innovative employee exit survey approach drives an average 80% response rate compared to an average 20% response rate from traditional exit surveys. Then, once the data has been collected, make sure you analyze the results and implement clear actions to ferret out the root causes of unwanted turnover.
3. Even if Employee Retention Action Is Taken, They Are Not Measured for Effectiveness
Once you understand “The Why” of unwanted turnover, you must follow through with proven programs targeted to address root causes. Then measure them to see what actually works. Too many companies identify what they think will work and then apply the same approach without ever re-evaluating or testing its effectiveness.
4. No Proactive Employee Retention Program in Place
Being able to identify employees who are at risk of leaving before they actually walk out the door gives you the focus and time required to retain top performers. If you know why they are dissatisfied, you can begin to change the game. Perhaps they feel that they are not appreciated or that their talents are not fully utilized.
Whatever the issue, meet with the manager to see what can be done to proactively engage and retain your top talent.
5. Too Broad a Brush
If employee turnover is an issue, it won’t necessarily be solved with a general or generic approach. Even if you uncover a lack of career development opportunities as a root cause, you will need to apply the solution in a way that is relevant and helpful to each and every individual employee. And you should work first with your most valued and crucial employees…the ones whose departure or lack of engagement would hurt the most.
The Bottom Line
Smart leaders manage employee retention as carefully as they manage the bottom line. They understand the impact on the business, identify the root causes of attrition, and address retention issues with practical and targeted actions within their overall talent management plan.
To learn more about how to avoid employee retention mistakes, download the Top 10 Research-backed Ways to Better Engage and Retain Top Talent
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