Your employees are your biggest assets, the human resources that keep your company running. Thus, attracting top talent is critical for business success.
But retaining them is equally important!
If you have a great candidate who is a good fit for the job, you don't want them to go looking somewhere else.
So how do you keep them happy?
That's where employee retention comes in!
Employees leave a company due to low satisfaction and engagement, lack of benefits, low motivation, and more.
Thus, for businesses to succeed, employers need to create and nurture an environment that keeps employees motivated and interested in their work.
But what exactly are the benefits of employee retention?
Employee retention is one of the most difficult problems that organizations face. Without retaining good employees, organizations will see a decline in their output.
Looking for workplace wellbeing Initiatives? Well, we've got you covered. This list of top 10 workplace wellness ideas will help you in higher efficiency!
Why Employee Retention Is Important?
Employee retention can help an organization save time and money, not to mention a lot of effort on paperwork. It helps the company to retain experienced and talented employees, and decrease the turnover rate.
No one wants a company where employees keep changing like a game of musical chairs! This disrupts the smooth functioning of the organization and hampers team building.
When an employee leaves and therefore needs to be replaced, your company incurs both direct and indirect costs related to the person's exit and the subsequent hiring process.
If you are looking to hire new people, it's important to know how to negotiate salary. Here are some tips on how to do salary negotiation in India.
Direct costs of employee turnover include:
- Expenses for advertising for the open position.
- PTO that has to be paid when an employee leaves.
- Cost of temporary substitutes, or cost of paying overtime to the existing employees
Indirect turnover costs include:
- Loss of employee expertise and experience
- Time spent on hiring, onboarding, and training new recruits
- Lag in production due to o disruption in work
This is why the importance of employee retention, and employee retention strategies cannot be understated for your company!
How Do Employee Benefits Impact Retention?
Employee benefits play an important role in employee retention because providing attractive benefits will cause more and more employees to stay back in your organization.
Added perks and benefits, along with a competitive salary, act as a great incentive for employees to stay back.
Employees want a well-developed compensation plan that goes beyond the paycheck, allowing them to efficiently balance their hectic schedules while feeling appreciated and respected by their company.
Flexible schedules, catered lunches, work-from-home days, employee wellness programs, and a greater number of paid company holidays are all becoming more popular as strategies to keep employees happy and productive, find a healthy work-life balance, and stay with your company for a longer amount of time.
Benefits and incentives show your employees that you care about them, and make your employees feel valued.
Additional incentives and better perks attract employees, encourage them to work hard, and as a result, your employee stays back in your company.
If your organization provides more and better perks, it will attract top industry talent. Employee wellness also translates to fewer sick days and, as a result, lower absenteeism at work.
Benefits like comprehensive health insurance, wellness programs, mental health support, and paid leaves are a few of the most coveted employee benefits, which can assure a higher percentage of employee retention and a low employee turnover rate.
This is especially relevant now since, in post-pandemic India, group health insurance is mandatory for all employers!
Find out more about comprehensive health insurance here
Top 10 Benefits Of Employee Retention
We've compiled a list of top 10 benefits of employee retention for you.
1. Improved morale
Everyone wants to be able to connect with their coworkers, but a high turnover rate and frequently leaving colleagues can disrupt this team-building process.
Employee morale might be harmed by this ‘revolving door situation’.
In addition to losing connections, employees who remain may have to take on larger workloads or obligations, thus getting their morale further down.
Your employees need ‘buddies’ in the workplace and retain connections. Click here and read on for more information about the buddy system.
2. Retain experience
The loss of institutional knowledge, skills, and relationships — both within the company and with customers and partners — is one of the most devastating costs of high turnover.
The organization also loses the opportunity cost, and the potential value the employee may have contributed. When a senior staff leaves, it can have an impact on succession planning.
Retaining employees mean that you are retaining that experience within your company.
3. Increased productivity
Employers and HR professionals face a whole slew of problems as a result of high turnover. The most obvious effect is a decrease in productivity.
On average, it takes a new hire one to two years to catch up to a current employee's productivity. Newcomers also require time to establish relationships with coworkers and customers.
Employee overtime and burnout, lower job quality, and delays are all difficulties that arise in an understaffed setting, which can occur due to lack of retention.
Employee retention can help an organization avoid losing productivity. Workplaces with high retention rates have more engaged employees who, in turn, get more done.
Employees that are more engaged are more likely to develop customer relationships, and teams that have had time to gel are more productive.
4. Improved company culture
The company culture is undeniably important in attracting and retaining the best employees.
When an employee leaves, others may wonder why and begin to question their own commitment to the company.
Simultaneously, when engaged individuals who are aligned with an organization's culture stay, the organizational ethos and environment are strengthened.
5. Improved employee engagement, employee satisfaction, and employee experience
Employee engagement is the act of fostering a favorable work environment in which people are willing and able to give their all.
An employee engagement strategy works in combination with employee retention programs, and retaining employees has a direct impact on improving employee engagement.
Employee satisfaction and experience are consequently improved, too!
Do you know why employee engagement is important to a company's success? Read this post to find out!
6. Reduce costs
Replacing an employee might cost up to twice as much as the employee's annual compensation.
As discussed earlier, most of these expenses are due to advertising the job position, interviewing and screening individuals, as well as onboarding and training new employees.
Other expenses include lost productivity, team morale concerns, and customer service or sales issues.
7. Improved customer experience
Customer relations are bound to improve if good employees in customer-facing roles are retained.
Customers build trust—and even friendship—with their primary contacts in an organization over time.
It takes time to hire new employees to take their place, and it takes even longer to reestablish client trust.
Furthermore, as new employees ramp up in their responsibilities, they may take longer to complete tasks or make more customer service blunders, negatively impacting the customer experience.
8. Fewer gaps in work
It can take some time to replace an employee who resigns. There will be a void in their position if they leave before your organization replaces them.
This suggests that either no one is doing this work or that other employees are working overtime to compensate for the absence.
This change might consume a significant amount of time due to the hiring and training processes.
With higher employee retention, there will be, thus, fewer gaps and breaks in work.
9. Improved brand reputation
When firms are able to retain employees, it can have a favorable impact on how they function. This can be beneficial to a company's PR.
When employees only have positive things to say about their employer, the brand's reputation can improve.
Additional benefits could include improved revenues, positive press, a competitive hiring advantage, and brand recognition.
Wondering how to build an employee recognition program? Click here to find out!
10. Improved team spirit
Team members can come to know one other better the longer they work together.
Your employees can get to know each other's personalities and working styles by working with the same folks for years.
This can lead to improved workplace communication and teamwork.
It can also increase employee camaraderie, which can lead to higher job satisfaction.
Fun Friday Games are a great way to improve Team Spirit, too! Check them out!
Unleash the Full Potential of Your Employees
Great employees want to work for great companies. And today's Indian employees are fully aware of their value and will not accept anything less than what they believe they are entitled to.
Furthermore, they are considering chances for upskilling and other perks in addition to just their paychecks.
Read this quick and easy-to-read guide for implementing employee benefits that work for you and your organization
If you want to get the most out of your employees as a company, you need to give them high-value and high-quality wellness programs that assist them both within and outside the workplace.
Here at Loop, we are committed to aiding employers and employees in building a healthy work environment.
We support you and your organization to take little strides toward a brighter future, by motivating employees to improve their job outcomes and assisting employers in reducing healthcare costs - it's a win-win situation!
Sign up with Loop to check out your customized health plan!