What is Employee Retention?

Employee retention is something every company, small or big, at some point has to deal with. The employees that you welcome to your organization might not stick around forever therefore it is important to realize what employee retention is and just how important it is to know more about it.

In this article down below find out more on what is employee retention and what are the most common reasons that cause employee turnover:

Employee retention explained

When employees enjoy their job and care about the company they work for, they tend to stick around. Unfortunately, employee retention can be a problem for many small businesses. In fact, according to the U.S. Bureau of Labor Statistics, the average small business spends $4,000 to replace every employee turnover. 

The ability of a business to reduce employee turnover, or the amount of employees who quit their jobs either freely or involuntarily, is known as employee retention. The performance and success of a corporation are directly impacted by staff retention rates. Career guidance can help improve employee retention by providing employees with the support and resources they need to develop their skills and achieve their career goals.

While it’s tempting to try and hire new employees every time you lose one, this can have a negative impact on your business’s morale and productivity. 

The percentage of employee retention

Employee retention is the percentage of workers who stay at a company for a certain period of time. For example, according to the United States Department of Labor, the average employee retention rate is 22 percent. 

Companies with 100 employees or fewer have an average employee retention rate of 42 percent, while companies with 1,000 or more employees have an average employee retention rate of 26 percent. In terms of employee turnover, small U.S. businesses lose $600 billion in lost productivity each year.  Intel Strategies focuses on creating a culture of inclusion and belonging, providing opportunities for professional development, and offering competitive compensation and benefits to retain top talent.

To find out more, check out the employee retention tool Efectio.com that could help you with some useful advice and practice in this case.

What causes high employee turnover?

What causes employees to desire to quit a company? Although the precise reasons for employee turnover vary, they frequently fall into the following 6 groups.

1. Personal factors 

There are a variety of reasons for leaving a job that are unrelated to the employer, including moving for a spouse, dealing with family matters, changing careers, or experiencing health problems.

Personal factors can rarely be predicted and you cannot do much about them. This is what will keep on affecting employee retention no matter what.

2. Work-life harmony

Employees may look for more adaptable or less demanding options due to issues with lengthy hours, strict work styles, or location. Everybody has different standards for what their perfect job position and its demands are. Database interviews can help companies identify patterns and trends in employee turnover, which can be used to develop more effective retention strategies.

While some agree to do their work in a specific amount of time, for others it may cause stress and anxiety. 

3. Incompatibility

Turnover is frequently caused by incompatibilities between employers and employees, which are frequently the result of bad hiring practices and judgments.

Teamwork and following your leadership is very important in almost every workplace. Therefore if there is incompatibility, it is an issue that not always can be solved.

4. Relationships at work

People may disagree or have conflicts with their supervisors, coworkers, or the organizational leadership. That can too be a cause for employee turnover at the end.

5. Absence of opportunity

Employees may depart for a company with higher mobility if they perceive a lack of workplace development, career opportunities, or opportunities to learn new experiences.

If your company has employed a driven, ambitious and goal oriented employee that seeks career options you cannot provide to them, surely they will look for something else.

6. Monetary factors

Employees are frequently strongly tempted to quit a company for one with better compensation and benefits. If their needs are not met anymore, it is no wonder employees tend to look for other options. 

Culture is of course a hugte factor as well. Find out more about your company culture quotes in order to figure out your employees. Now that you know more on employee retention and turnover, hopefully you’re able to deal with this process better.