Professional Documents
Culture Documents
Retention Strategies
That Will Reduce Your Turnover Costs
Managing employee retention requires proactive strategic interventions that impact employee morale
and motivation to ensure that employees are engaged, satisfied, and productive. An effective employee
retention program benefits an organization’s ability to attract and retain employees and reduces costs
related to recruiting, hiring, and training.
Physiological factors:
• Working conditions
• Peer relationships
• Leadership quality
• Job Security
• Compensation
• Status
Motivational factors:
• Responsibility
• Job Satisfaction
• Recognition
• Achievement
• Growth Opportunities
• Advancement
Whatever an organization’s size, employee turnover can exponentially impact a company’s remaining
employees, customers, operations and finances.
1
02.24.19
What is the cost of employee turnover?
Employee retention matters because high turnover rates equate to high costs of doing business.
Numerous studies indicate that the cost to replace an entry level employee can average 40% of the cost
of their annual salary (upwards of $15,000 to replace a single employee earning $31,000 per year).
Replacing higher-level employees --such as managers and executives-- can cost upwards of 150 to 200
percent of their annual salary. By this metric, the loss of just five entry-level employees could cost your
organization over $75,000. And if you lose a single manager earning $75,000 per year on top of it, those
costs can more than double.
Aside from cost, high turnover impacts the remaining employees. Employees who feel like their
organization is a revolving door will have feelings of stress, anger, resentment and are likely to
disengage; ultimately impacting the overall company culture and teamwork. Implementing a thoughtful
strategic employee retention strategy will cut costs and contribute to a sustainable team of employees.
Retaining employees is important to the success of your organization. A high rate of employee turnover
can result in a loss of knowledge, skills, and organizational capabilities negatively impacting your bottom
line. The cost of losing an employee includes not only lost productivity, but also adds the expense of
recruiting, selecting, and training a new employee.
Two out of three employees are planning to quit their jobs this year. According to Harvard Business
Review, there are five signs that an employee is going to quit:
• Decreased productivity
• Increased negativity
• Less job-related focus
• Increased expression of job dissatisfaction
• Increased tardiness/short days
These red flags don’t even include some of the more obvious signs like employees dressing up more
than usual at work, taking more sick days or longer lunch breaks, or other indicators that they may be
interviewing.
A million respondents to recent study indicated that workers are most likely to switch jobs at the one-
year mark. This phenomenon doesn’t stop at year one – the same study found a yearly trend, with a
spike in the likelihood of voluntary turnover with each successive anniversary. So what factors impact an
employee’s decision to quit?
The answer lies within the dynamics of your employee retention strategies.
2
02.24.19
Proven retention strategies to keep committed and engaged employees
1. Execute effective hiring, on-boarding, and orientation processes and practices
o Seek candidates who have shared values and will thrive within your culture
o Hire the person who fits the job: one who is trainable and has growth potential--both personally
and professionally--within the organization. Remember that technical skills are easier to train
and take less time and effort than soft skills and values
o Hire slow: focus on the values, character and culture-fit during the hiring process
o Hire mature: seek candidates capable of sustaining long-term commitments. A mature
candidate makes decisions based on character, not feelings. They tend to be secure in their
identity and can put the success of their teammates and the organization before their own.
o Hire employees who value service, are service oriented, and have a service heart
o Provide structured on-boarding and training which helps new employees to quickly understand,
assimilate, navigate, and thrive within your organization
3
02.24.19
5. Foster healthy work-life/load balance programs and opportunities
o Consider creative shifts/scheduling and working off-site
o Allow work sharing and collaboration
o Provide cross-training
o Alter work responsibilities
o Manage and prevent employee burnout. Encourage breaks, rest and vacation days
6. Develop and foster a positive culture where people like to be and enjoy working
o Foster a work family/team environment where people and relationships matter
o Promote open, safe communication and feedback; building and maintaining trust
o Inform and include employees in strategic planning goals, tactics, and performance measures
o Include and empower employees in the decision making and problem-solving processes
o Live and role-model your organizations values. Inspire and develop leadership at all levels
o Make sure your office or work space is at a comfortable temperature, is well-lit and properly
ventilated. The furniture should be ergonomically designed to prevent aches and strains at
work.
Comparing your existing policy to the strategies listed in this article could be a useful way to analyze the
areas that your organization might need to improve and develop. While every organization operates
under a different paradigm, attention to certain themes involving culture, values, and collaboration can
make a big difference in your bottom line. They should be adopted as the core principles that guide you
in the development or re-calibration of your retention strategy.
4
02.24.19