When a business aims to cut costs, a key building block is developing a loyal team. The costs of recruiting and training can cut into profits if your company has a high turnover rate. Here’s a look at the benefits of employee retention and how it affects commercial insurance.
What Is Employee Retention?
Employee retention means hanging on to the same staff that grows with the company. Too much turnover weakens an organization’s productivity and bottom line. A company has a better outlook if it nurtures the same talent to build skills and a cohesive team. Here’s how.
A recent Gallup study found the cost of replacing an employee can be as much as double their annual salary. The cost of recruiting may involve expensive marketing through media platforms, while training costs may involve paying for expertise and supplies.
Whatever knowledge ex-employees gain from training or experience on the job is taken somewhere else. The cost of replacing this lost knowledge can help grow the workplace if the employees are retained
Roadblocks to productivity
Constant turnover leads to an inefficient work environment that slows productivity. If this problem persists, it can lead to a labor shortage and falling profit margins.
What Are the Benefits of Employee Retention?
- Reduced costs – With sufficient employee retention, you can devote more resources to business development rather than recruiting and training.
- Improved morale – Maintaining the same staff creates a sense of unity, pride and family among team players.
- Increased productivity – The more workers learn their jobs and improve their skills, the more potential for higher output.
- Increased customer experience – Customers may develop familiarity and a comfort level with certain employees that keeps them coming back.
- Less time spent recruiting and training – The less your company has to spend on recruiting and training, the more it can focus on sales and marketing.
- Improved company culture – The overall workplace atmosphere is typically more positive with a well-developed team.
- Higher employee engagement – Employees who like their jobs will put more effort into improving work by learning from supervisors and coworkers.
- Improved revenue and ROI – If you only train a team once on the basics instead of continuously, it will make dollars invested in each individual go much further.
- More employee expertise – The longer people work for your firm, the more knowledge and expertise they’ll gain, which leads to greater problem-solving capabilities.
Strategies to Improve Employee Retention
- Hire strategically – Focus on hiring people that fit your company culture and already bring experience to the table.
- Improve the onboarding experience – Give new hires plenty of reasons to stay by making orientation enjoyable.
- Leverage feedback from top to bottom – Improving a company relies on new ideas from a diverse group to get multiple perspectives.
- Prioritize recognition – Let employees know their work is valuable and appreciated.
- Drive employee growth – Give employees incentives and opportunities for career advancement.
- Uncover insights from exit surveys – Learn how to improve work conditions from direct employee feedback.
Role of Technology in Employee Retention
Digital technology makes it easier to connect with employees on a regular basis to understand their needs and concerns. Various types of modern communication, such as online chat, email, and texting, allow for real-time interaction.