As a business owner or entrepreneur, you know that your employees are your most valuable asset. They are the ones who contribute to your bottom line and help you achieve your goals. So, it stands to reason that you would want to do everything in your power to keep them happy and retain them for the long term. Unfortunately, employee retention can be a real problem. Turnover can be highly costly for your business and the economy. It’s estimated that the American economy loses about a trillion dollars because of this problem. So let’s look at some of the challenges associated with employee retention and what you can do to overcome them.
Turnover Rate
The turnover rate for employees is currently at an all-time high. The average cost of turnover was $15,000 per person, so if five employees left a company in one year, the cost would be $75,000. That is a lot of money to lose! For small businesses, this number can be even higher. The turnover price includes costs like advertising and recruiting, onboarding and training new employees, and lost productivity while the new hire is getting up to speed. In addition, a hidden cost associated with the turnover is often overlooked: the morale of your remaining staff. When coworkers leave, it can hurt morale and lead to even more turnover.
Lack of Growth
There are several reasons employees leave their jobs, but one of the most common is a lack of opportunity for growth and development. Employees want to feel like they are part of something larger than themselves and that their work is meaningful. When they don’t feel this way, they will begin to look for opportunities elsewhere. As a business owner or entrepreneur, you need to provide your employees with opportunities for growth to feel like they are part of something larger than themselves. Here are two ways to do that.
Mentorship
Developing a mentorship program is a great way to allow your employees to grow and learn. Pair them up with someone who has been in the business for many years, and they’ll be able to tap into that wealth of knowledge. They can also share their expertise with others. Additionally, consider hiring a professional HMO mentor service if you want to source outside mentors. This service covers various topics, including HR, leadership, marketing, and culture. This is helpful if you don’t have experienced people inside your workplace.
Promote from Within
Another great way to show your employees that you value their growth is by promoting them within the company when possible. If you have an employee who has proven they are ready to take on new challenges and responsibilities, give them a chance to do just that. They will feel valued and unique, which will help improve morale. Plus, they’ll likely be more productive because they are doing a job they enjoy.
Lack of Appreciation
Another common reason why employees leave their jobs is that they don’t feel appreciated. Everyone wants to feel like their work is valued and that they are making a difference. Employees who don’t feel appreciated will begin to look for other opportunities where their work will be respected. As a business owner or entrepreneur, you need to make sure that you are regularly showing your appreciation for your employees’ hard work and dedication.
Poor Compensation
It’s also essential to ensure you’re offering competitive compensation and benefits packages. If your employees feel like they’re being underpaid or that their benefits aren’t good enough, they’ll be quick to start looking for a new job at a company that can give them what they deserve. So make sure you regularly review your compensation and benefits packages to align with what other businesses in your industry are offering.
Unclear Job Descriptions
Another common reason for high employee turnover is unclear job descriptions. When employees don’t know what’s expected of them, it can lead to frustration and feeling lost at work. Make sure you take the time to sit down with your employees and review their job descriptions so they clearly understand their responsibilities. Additionally, it’s essential to be clear about how your employees’ work impacts the company’s success. They’ll feel more motivated to do their best work when they see their contributions are making a difference.
The cost of employee turnover can be extremely high, especially for small businesses. However, you can do many things to improve employee retention rates, such as providing opportunities for growth and development and showing appreciation for hard work. By taking these steps, you can create a positive environment where your employees will want to stay for the long term.
