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?
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.
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.
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:
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.