Retention vs Recruiting: The scales are tipping

First, it was The Great Resignation. Now, it’s The Great Retention. The scales are tipping—and it’s a shift that’s long overdue.

Since pandemic-inspired job switching began, employers have been focused on recruiting. As a result, their burning question has been: how can we attract the talent we need to replace exiting workers? What do candidates really want?

Now, some employers are taking a more proactive approach. Their burning question has become: how can we hold onto the talent we have? How do we keep our people happy, so we can keep them on board?


The Business Case for Prioritizing Retention 

It’s no secret: recruiting is hard. The process of hiring, onboarding and training new employees is time-consuming, resource-intensive and expensive.

According to Gallup research, the cost to replace a single employee ranges from one-half to twice that employee’s annual salary. Now, multiply that by all the employees you lose every year! Per the Bureau of Labor Statistics most recent jobs report, 3.9 million workers—2.5% of the U.S. workforce—quit each month.  

Altogether, turnover costs U.S. employers $1 trillion per year, per Gallup, and that’s based on hiring costs alone.    

Remember, new hires also need time to get up to speed—especially if they’ve relocated and are acclimating to a new city as well as a new employer.

The Incalculable Value of Institutional Knowledge    

When you lose a trusted employee, you don’t just lose a single worker…there’s a ripple effect. Resignations hurt morale and disrupt productivity. They can even cost businesses customers.

They also erode a company’s reserve of institutional knowledge. Veteran employees possess hard-earned insights, industry-specific knowledge and a historic understanding of the business—not to mention, established client and vendor relationships. All of these ensure smooth operations and customer satisfaction, while giving businesses a competitive edge.

No wonder some employers are shifting their focus to retention. Seasoned employees already know their organization’s values, processes and goals—and it’s hard to put a price on that.

How Do You Get Employees to Stay? 

Not surprisingly, many of the same qualities job hunters seek in new employers are highly valued by current employees, too. Often, the best action an employer can take is to simply keep building on existing initiatives and benefits, such as:

Competitive Compensation and Benefits

Employees are more likely to stay with an employer when their compensation is competitive within their industry—along with benefits like healthcare coverage and retirement plans. Therefore, regularly benchmark your wages and benefits to ensure you’re competitive. And consider providing enhanced incentives like more PTO to employees based on years of service, encouraging longevity.    


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Work-Life Balance   

Promoting policies that support work-life balance—i.e., remote and hybrid work options, flexible hours, generous paid time off—may significantly boost employee retention. When employees feel that their personal lives are respected and that their employer genuinely cares about their overall well-being, they’re less motivated to look elsewhere.

A Thriving Company Culture    

Who doesn’t want to work in an inclusive, supportive culture where they feel comfortable, appreciated, and engaged? Employers that foster a positive workplace environment, invite fresh ideas and provide recognition for outstanding performance are more likely to retain their talent.

Strong Communication        

Wow: Gallup also found that more than half of employees who quit a job said that their manager or organization could have stopped them—if only someone bothered to talk to them about their satisfaction levels or career plans first. Managers who regularly check in with their people are a powerful force for retention in their own right.

Career Development Opportunities

Employees are more likely to stay with employers that invest in their professional development and offer career growth opportunities, such as mentorships, training and inclusion in professional events.

When employers offer career mobility, it gives employees a reason to stick around. That means making employee career goals a regular part of performance-related conversations. It means regularly promoting from within—whether advancing vertically or offering transfer opportunities to other parts of the business.

The bottom line is, when employees feel valued and cared for, retention stays high. And while recruiting will always be important for growing companies, it’s no substitute for cultivating the proven performers you already have in-house.

For more information on this topic, read our ebook, Preventing Turnover from the Start.


Human Resources Today