This article was written by Bern Lefson, SCORE Orange County Management Counselor
“I just lost my best performing employee and I don’t know why?” Does this question resonate with you; if so, join the many who struggle with this issue.
Companies spend a great deal of time and money recruiting and training employees, and the cost of replacing staff members lost through turnover is great. The monetary cost of replacing one employee is generally estimated to range from 50 percent to 200 percent of the annual salary for the position, and may even be higher in very specialized fields. Additionally, poor employee retention can have a negative impact on workplace productivity, job satisfaction, and overall morale.
In order to figure out how to improve employee retention, employers need to first identify the reasons for turnover. It’s important to realize that some turnover is inevitable. It’s natural for some employees to choose to pursue different career paths for a variety of different reasons. When turnover is excessive, however, employee retention problems may be a symptom of a larger problem that exists within the organization.
There are some common reasons why employees leave. One of the most common is feeling unappreciated. Managers who want to keep their best employees are well advised to recognize employees both for outstanding accomplishments and consistent, on-target performance. As is said time and again; “people don’t leave jobs, they leave supervisors.” Other common reasons include:
- Concern regarding promotion opportunities.
- Harassment concerns
- Misunderstanding about job performance expectations
- Personality conflicts among peers and/or supervisors
- Perceived lack of appreciation for employee.
- Supervisors in need of managerial training
- Workforce morale problems
Some innovative benefits programs that are gaining favor in today’s workplace and can have a positive impact on retention include:
- Flextime so that employees may better juggle the stresses between work and their life
- Training opportunities so that employees feel appreciated and valued. This also aids in keeping employee skills current and marketable
Managers who recognize the importance of taking proactive steps toward keeping their best people motivated and satisfied can have a positive impact on employee retention. They can begin by evaluating their own management styles, and taking steps to make sure that all employees feel appreciated.
Additionally, managers focused on learning how to deal with turnover problems should encourage their companies to implement an exit interview program if one does not already exist. The results of exit interviews need to be evaluated on an ongoing basis, to identify patterns of organizational behavior that need to be corrected.