No company celebrates the loss of an employee. The turnover process is a drain on a company’s time and resources and can wreak havoc on a team’s morale and productivity.
Employee retention strategies have taken up permanent residence in the brains of almost every executive, human resource manager and team leader in the world. They get it. This isn’t new information.
Three million people quit their jobs every month, and 30% of employees leave within three months of starting. Retention is ever-present in the minds of company leaders, but many companies still haven’t figured it out. The key to this issue starts with answering two simple questions. Why do employees leave? Why do they stay?
The Generation Gap
Every new generation of employees entering the workforce is motivated by something different. There may be some crossover; there may be outliers in every group. Let’s look at what each group is most interested in.
Baby Boomers (1946 – 1964)
Baby Boomers are most interested in job security. They are famously hard-working, goal-oriented and traditional in their jobs. This generation wants to be recognized for their skills and productivity.
Gen X (1965 – 1980)
Generation X employees are most interested in work-life balance. They prefer greater autonomy from their employers and want to be trusted to do their jobs since they bring decades of experience to the table.
Millennials (1981 – 1996)
Millennials are most interested in freedom and flexibility. They have a deep longing to do work that is meaningful and fulfills a sense of purpose. They love to know that the work they do might one day change the world. They prefer to be judged for the quality of their work, not the number of hours they put in.
Gen Z (1997 – 2012)
New to the workforce, Generation Z employees are most interested in stability and security. As a generation that was raised on social platforms, they prefer equal and collaborative management styles. They also value diversity and social responsibility.
Why the Generation Gap Matters
The top companies in the world know a secret. No matter their generation or how they’re motivated, people have a deep desire to derive meaning and fulfillment from their work. What that means depends on the individual. If a company wants to be successful, it must adopt a diversified and personalized approach to employee retention strategies.
The job market is not overflowing with talented, jobless people desperate enough to work for any company with a job opening. In fact, it’s the opposite. Modern employees are empowered enough that if they don’t want to work somewhere, they won’t. So, improving employee retention should be one of the primary goals of every organization.
Companies simply can’t afford to lose valuable team members. To further illustrate that point, here are six reasons why companies must prioritize employee retention:
6 Reasons Why Employee Retention Is Important
1. Employee Well-Being
Employee turnover may harm the business, but it also hurts the employee. When there aren’t enough people to accomplish a goal, loyal employees are forced to work harder to pick up the slack. As a result, they’re stretched thin, unable to work on the projects that make them excited and are possibly upset about losing their friends.
When employees are unhappy, it bleeds into every aspect of the business. High employee retention ultimately results in higher team morale, which is excellent for business. With millennial and Gen Z employees, emotional, physical and financial well-being is essential.
2. Training, Talent and Experience
Every time an employee leaves, they may take months or even years of training and experience with them. Gen Z and Boomer employees, for instance, have decades of experience. Too many companies spend resources on recruitment and training, which costs them time and money.
Instead, organizations should cultivate the talent that already exists. The longer someone works at a job, the better they get. Building a long-term relationship with an employee opens doors for new training opportunities, out-of-the-box ideas and higher quality work. Companies must focus less of their effort on recruitment and more on retention.
3. Team Building
A constant rotation of team members alters the dynamic of a group. This requires a team to take precious time adjusting and learning how to work together, which is time they could’ve used to achieve new goals. It’s impossible to build a solid team if the team isn’t able to stay together. This is particularly important to employees that value collaboration, like Generation Z.
Beyond that, low employee retention also hurts a company’s reputation. If an employee leaves, there’s a chance they will post about their experience on a website like Glassdoor, which can make it impossible for companies to hide. As a result, companies with a bad reputation cannot recruit the best talent, ultimately harming their business.
4. Customer Experience
Customers notice when the people they like to work with suddenly disappear. They are also affected when there aren’t enough employees on a shift, and a team is stretched too thin. If an employee isn’t happy at their job, customers will notice.
Once employees have more training and more experience, they’re better equipped to deal with customer complaints and complex issues. Focusing on employee retention results in a better customer experience, which results in happier customers.
Employee turnover can deliver a massive blow to productivity. When employees are stretched thin and forced to cover shifts, it can be exhausting. If an organization employs Millennials, this can be especially damaging because they prioritize their own physical and emotional well-being.
High employee retention also allows businesses to build teams that are comfortable working together. Comfort enables people to communicate more openly to collaborate and share new ideas. When a team isn’t used to working together, they can experience breakdowns in communication, which eats up valuable time and productivity.
6. The Bottom Line
It costs approximately six to nine months worth of an employee’s salary to replace them in a low- to mid-level position. Replacing an executive-level role can cost up to 213% of that executive’s salary. However, the true cost of employee turnover goes beyond numbers on a spreadsheet.
When an organization loses someone, they lose talent, ideas, intellectual property and experience. They can also lose productivity, customer satisfaction and the ability to create a cohesive team. Focusing time, attention and resources on employee retention saves companies money.
Diverse Companies Require Diverse Solutions
Employees want to know that they are aligned with the organization they work with and that their employer cares for them. If a company is struggling with employee turnover, the solution is simple.
The key to employee retention is to consider every individual within an organization and understand that different people have different needs. How do companies determine what those needs are? Open communication.
They should survey their people to find out what’s important to them and equip their team leaders with the ability to work with team members on their career paths. Companies should also consider customized benefits platforms to ensure that all of their employees get the benefits they need in order to thrive.
Not all benefits programs are suitable for everyone; the one-size-fits-all approach doesn’t work anymore. If companies hope to improve employee retention, they must consider the specific needs of their employees. The Fringe platform is the perfect way to do that.
Contact our team to schedule a free demo today!