In order to build a strong workforce, companies need to implement ways to keep their employees happy. By increasing the longevity of each employee, you can have a more skilled team. Employees who grow with the company know the goals and expectations they need to work toward. In this article, we define employee retention and share the major benefits of employee retention strategies.
Related: 20 Strategies for Employee Retention
What is employee retention?
Employee retention is how well companies can keep their employees around. Companies that have low turnover rates tend to use employee retention strategies to encourage team members to stay with the company for a long time. When you have a high employee retention rate, this can indicate that employee morale and job satisfaction are high at your company. It can also signify that the company is making your workplace an enjoyable environment to work in every day.
Related: How To Calculate Employee Turnover Rate
10 benefits of employee retention
Here are the top ten benefits of employee retention:
Increased employee loyalty
When employees feel that their employer supports and values them, they may feel more loyal to the goals of their company. Finding ways to keep employees around longer can also improve loyalty since long-term employees have invested a lot of time and effort into their job. With increased employee loyalty comes more productivity and ethical work. For instance, an employee who genuinely cares about the company may feel more inclined to finish their work on time and be honest about the hours they report.
Decreased hiring costs
Finding new team members can get quite costly. Things like hiring recruiters, training staff, giving sign-on bonuses can add up. By keeping their employees around, companies can limit these costs. When managers are constantly hiring new people, this can take up a lot of time and money. Companies can save money by investing in their current staff rather than looking for new candidates.
Related: The Real Turnover Cost of Losing an Employee (And Ways To Retain More Talent)
Highly skilled workforce
When an employee is with the company for a while, they can build their skill set and relevant experience. Rather than starting over with a new employee, employers can build an effective workforce by using their resources for continued training and career development among current team members. When filling a high-level position, employers can benefit from promoting internally since their current employees already know the company and may have the right set of skills.
Related: How Managers Can Retain More Employees (With Tips)
Fewer transitions and employment gaps
High turnover rates can lead to a decrease in productivity. That’s because when an employee resigns, it can take some time to fill their role. If they leave before your company replaces them, there is a gap in their position. This means that either no one is doing this work or other employees have to work extra hard to make up for this absence. Along with employment gaps, low employee retention means that you need to hire new people. Between the hiring and training process, this transition can take up a lot of valuable time.
Improved customer relations
Clients can notice when companies have high turnover rates. This might be concerning to customers who want to support businesses with positive company cultures. When companies keep their employees around, clients have the chance to get to know employees. This familiarity can benefit businesses since clients may feel brand loyalty due to working with a favorite staff member. Creating relationships and rapport with customers is an important part of making repeat sales.
Related: Q&A: What Are Employee Retention Rates?
Positive company culture
High turnover rates can lead to lower employer morale. It can be challenging for employees to feel excited about work if their coworkers are always resigning. When employees want to stay around, the company culture can benefit. Everyone is an integral part of the company culture, so when employees feel happy and committed to their work, this can help contribute to a positive culture at work. Along with benefiting current employees, good company culture can attract top talent and improve customer relations.
Better brand reputation
When companies are able to keep employees around, this can reflect positively on the way they operate. This can be good public relations for a brand. When employees only have good things to say about their company, this can boost a brand’s reputation. This can come with all kinds of additional benefits, such as increased profits, positive press, competitive hiring edge and brand familiarity.
Deeper connections among staff
The longer colleagues work together, the better they can get to know each other. By working with the same people for years, you can get to know each other’s personalities and working styles. This can lead to better teamwork and collaboration in the workplace. It can also lead to more camaraderie among staff, which can contribute to more job satisfaction.
More competitive staff
When news spreads about a company’s high retention rates, this can help the company attract the very best talent. Companies that lack employee retention strategies may lose staff members to their greatest competitors. When your company is a good place to work, it can attract the people who wish to leave their competitors. This is useful for companies looking to gain a competitive edge by having a talented staff.
Consistent processes and systems
Having the same employees around makes it easier to keep your processes and systems consistent. Each time an employer takes on a new hire, they may experience a gap in the way their systems work. For example, a company with a small customer service department may fall behind on work if they lose one staff member. Likewise, a new team member may not be aware of all the company’s policies and protocols, which can hinder efficiency. By having employees around for a while, employers can ensure their team fully understands how the company operates.
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