According to Investopedia.com, hiring a new employee can cost 1.5 to 3 times the salary of that employee. First, you have the cost of recruitment. Factoring in advertising, the time spent reviewing resumes and other tasks related to recruitment, conducting interviews, and administering background checks, drugs screens, and other types of tests, recruiting just one individual can cost approximately $3500. The next expense is training. On average, it takes five to six months for an employee to be fully trained and functioning at 100% productivity rate, so during that time, your company has the cost of lost productivity. Next, you need to factor in employee benefits. Companies typically spend 1.25 to 1.4 times an employee’s base salary on health insurance, dental plans, and other employee benefits. Additionally, you have the cost of integrating a new employee into the workplace, be that the need to purchase ergonomic desk equipment or a new cell phone. Finally, there are indirect costs, such as stress and reduced morale among your other employees as they cover the responsibilities of those who have moved on, the potential to lose clients, and possible lost institutional knowledge. The monetary value of these indirect costs is immeasurable.
Keeping all this in mind, your company of course wants to do the best it can to retain its staff. The first step in doing so is understanding what motivates your employees. This can be a challenge, as the current workforce spans five generations. They include:
- Traditionalists– This generation was born between 1922 and 1945. Traditionalists have lived through tough economic times. They are often in the workplace by choice or to supplement retirement income. They respect authority and are generally very loyal.
- Baby Boomers– This generation was born between 1946 and 1964. This generation enjoyed many opportunities their parents did not, including more open access to education and the ability to engage in political activism. The large volume of boomers made the job search highly competitive in their youth. Therefore, boomers have a tendency to feel those younger than them need to pay their dues before moving up the corporate ladder. This group is motivated by competitive salaries and opportunities for future career growth.
- Generation X– This generation was born between 1965 and 1980. Many workers in this group had two working parents, and were thus raised to be very independent. Therefore, this group does not like to be micro-managed. They are also the first generation to voice the need for work/life balance and are motivated by perks that can help them achieve this, such as flexible hours and the ability to work from home.
- Generation Y– This generation was born between 1981 and 2000. This group has been fully immersed in technology since birth. They also grew up in an era where people became more sensitive to issues of diversity. They are open and social and enjoy working in groups. Frequent feedback is very important to them.
- Millennials– This generation consists of anyone born after the year 2000. While this group is only just now old enough to begin working on a limited basis, it is assumed they will place an even greater value on teamwork and the use of technology in the workplace.
Regardless of the generation, when any discussion about employee retention takes place, training is often at the heart of it. According to go2HR, approximately forty percent of employees who receive poor job training will leave their position within one year, citing said lack of training as the primary cause. There are several reasons why staff training should be at the heart of any employee retention initiative.
- A well-trained employee is better equipped to perform the tasks required of them, and therefore will help your business run more smoothly and efficiently.
- Today’s employees desire more than just a paycheck; they want to continue to grow and develop their skills. Offering them the opportunity to do so is a huge motivator for them to stay.
- Providing your employees training to help them develop their skill sets will allow them to contribute to the company in new and exciting ways. This keeps them more engaged and involved, and improves overall job satisfaction.
- Your employees will become bored if they are allowed to stagnate, constantly completing the same repetitive tasks. By training them to do other things, you are showing them you have confidence in their abilities. This instills loyalty and commitment to your company.
- By keeping training ongoing for your employees, you have the ability to cross-train them on the jobs of others. Cross-training creates team spirit as employees learn about each other’s daily tasks. It is also very helpful for your company in keeping productivity up when employees go on vacation or have to take extended leaves of absence.
- By investing in training for all of your employees, you are ensuring that long-term institutional knowledge is shared among everyone. This prevents a future where an individual’s retirement throws your company into a tailspin because they were the only person who knew how certain tasks were handled.
Once you have consistent company-wide training in place, Randstad offers some additional ideas on how you might improve the experience of your employees.
- Aside from training, chances are there is no one single thing you can do that will reach each and every employee. Their needs will likely vary depending on their department, specific job title, etc. One way to learn more is to poll your employees on their overall satisfaction and obtain their suggestions on how things in the company can be improved.
- Take the time to determine if your company is using the best software and other equipment necessary for your employees to do their very best work. If your company can reasonably invest in systems which can make tasks more efficient for your employees, do so.
- Assess your current company structure with the goal of making sure there are adequate career ladders available for your employees. If not, begin building layers of additional tasks employees can take on to continue being promoted and earn seniority within the company. A clear pathway for professional growth is very important in today’s workplace.
- Offer your employees free cognitive and personality testing. This not only gives them an opportunity to learn more about themselves, but provides your company a basis for determining their strengths, work style, and best fit within your organization.
- Consider offering benefits which your employees can customize to create their own package. For example, some employees may value pet insurance over dental care, or flex time over the ability to take personal days. Giving employees more control over their benefits gives them a sense of engagement and ownership in your company.
- Today’s employees value a strong sense of community, so your company should provide ways in which they can connect and communicate. Whether it is an annual company picnic or an online community, it is important to give your employees the opportunity to bond over something other than the big office project that is due next week.
In summary, the very best retention strategies include constant employee training and development, an understanding of the needs of the various generations currently in the workplace, and the ability for employees to advance in the company if they wish to do so.