If you’re looking for an employee retention rate formula, hopefully, this example will help:
A company has 100 people, but an annual employee retention rate of only 60%. Over the course of the year, this company will have lost 40 employees. That’s a lot of people to replace!
Employee retention: why it matters
Companies put a lot of focus on hiring the right people, but making sure they stick around is just as important. Although some employee turnover is unavoidable, a low staff retention rate can cause significant damage for several reasons – often interrelated. Here are three consequences of a low employee retention rate:
The knock-on impact of these losses is why the importance of employee retention rate shouldn’t be underestimated.
However, businesses experiencing low employee retention rates shouldn’t panic. Read on for employee retention techniques that can help get things back on track and create a loyal workforce.
Employee retention ideas and strategies
Implementing employee retention strategies will increase company retention, which will not only save money, but ensure that staff are happier and more satisfied in their roles.
There are many employee retention theories floating around that may seem confusing, but really the cornerstone is simple: make employees feel valued.
Easier said than done? No, with a proper strategy it’s both achievable and straightforward. Across businesses of all sizes and kinds, focusing on four key areas can rapidly increase employee retention and create a happier workforce in general.
Employee retention: on the way to success
Not all of these changes can be implemented overnight, but starting with the first steps today will pay off.
By following the employee retention strategies laid out above, businesses can achieve employee record retention and enjoy a whole host of associated benefits, such as increased productivity, job satisfaction and happiness.
Employee retention may seem as if it’s focused on the numbers, but really it’s about people. Keep talent and expertise on your team, and you’ll go far.
As experts in Digital Coaching, CoachHub have enabled many businesses and careers to transform. We’ve outlined a few of the coaching services we offer here, and you can request a demo on our website.
How CoachHub works
Regular coaching sessions with a top business coach.
Enhance sessions by choosing from an extensive library of micro-learnings to complete between sessions.
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Why is talent management important?
Talent management is an integral part of every organisation. In recent years there has been a monumental shift in power from employer to employee. Organisations must compete for the best talent. Hiring can be a lengthy and expensive process, so ensuring that you manage your talent from the very beginning, even during the hiring process, is crucial for an organisation to thrive. Employee turnover is also very expensive. By implementing talent development programmes, you can nurture and retain your employees.
What are the key components of talent management?
Employee planning and recruitment – by clearly identifying what your organisational goals are, you can identify what employees you need to get you there.
Talent acquisition, mapping and retention – It is important to look at talent both internally and externally. Retaining your employees and hiring from within is a more cost effective way to establish leadership positions. A good way to build an internal talent pool is to establish a talent management programme within your organisation.
Performance management – To help move an organisation forward, the right employees need to be aligned with the right roles, developing objectives for success and supporting their development.
Learning – Learning is more than just training. Effective learning programmes should include activities that support the organisation’s objectives and culture When an employee sees how their growth impacts the organisation, they acknowledge how valuable their role is.
Career development – This relates to the talent retention component of noticing that hiring from within is not only an option but more often than not, the preferable more cost effective option. Provide your talent with the necessary professional development tools, like coaching, that can advance their career.
Succession planning – What happens when positions become available? Who will fill these roles and what needs to be done to get there? Having a plan in place means that the decisions are already made and there will be no disruptions when the organisation needs to fulfil new roles.
How do you identify high-potential employees?
Do not confuse high performers with high potential. Performance is of course important, but is not the only indicator. It requires solicit management input to establish a list of candidates and then confirm with a multi-trait assessment to ensure the list is accurate. This assessment should be in live with the company values. Intuition and performance are both acceptable but these must be paired with high potential assessment methodologies that can measure desired traits, for example agility, flexibility and drive.
How is talent management measured?
A mixture of both quantitative and qualitative metrics should be measured. Quantitative metrics include: turnover, percentage of high potential talent, percentage of external vs. internal hiring, financial and logistical onboarding costs (both internal and external). Qualitative measures include employee and manager satisfaction, employee engagement, exit interviews and performance review comments.
Behavioural Scientist at CoachHub.io
Rosie is a behavioural scientist at CoachHub, where she applies insights from positive psychology, neuroscience and behavioural science directly into digital coaching programmes and an approach that drives individual and organisational transformation. She works as part of the in-house research and development team, the Coaching Lab, and contributes to the advancement of the science of coaching and behaviour change; in addition to working both internally with in-house researchers and with world-class external academic teams to design and execute groundbreaking studies.
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