The Price of Retaining Employees
In an article written by Gregory Smith, he said that the cost of replacing a per hour worker may reach between $4,000 to $7,000. In the case of middle level salaried staff, the expenses may reach $40,000. The cost of replacing an employee is commonly 2. 5 times higher than the salary of the individual. The expenses related to replacement of the employee usually include lost clients and business and damage to morale.
This will cover the cost for advertisements, screening, verification of credentials and references, interview, selection, and training (Smith, n. d). Spending time and money will not in any way provide managers or companies a distinct advantage over their competitors. However, according to a report released by a research firm, 54 percent of companies continue to show apathy in order to generate a culture of high-retention rate or cut down turnover percentage of their company.
The cycle continues – the employee quits their job, managers conduct interview and selection— giving their nearest competitor with lower employee turnover to strengthen their productivity (Smith, n. d). The Key To Achieving Employee Retention It is every employee’s desire to work in an organization that can provide them with personal satisfaction and meaning. According
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d). In order to keep up with the competition, organizations must see to it that they set their sights on improving the flexibility of their workplace. Due to the stringent environment in the workplace, majority of employees have put their families as second fiddle to their work. In a survey conducted by the Randstad North American Employee Review, it was discovered that only 34 percent of employees in the United States are looking for a traditional full-time employment (Smith, n. d).
Another important factor that can contribute to employee retention is communication. In 1995, Boeing Company experienced its second longest employee strike since the Machinists Union’s 69-day strike. During that time, the company lost millions of dollars and went through huge customer service problems after failing to deliver 36 planes on time. Boeing President Frank Shrontz admitted that it was the company’s fault for failing to inform the employees about their problem (Smith, n. d).
In addition, companies must likewise provide their employees with opportunities wherein they would have time to enjoy their jobs. Reducing boredom by allowing employees to discuss topics that interest them can help keep the employees motivated with their work (Smith, n. d). Moreover, rewarding and recognizing employee achievement may reduce turnover of employees as well. In a study by Robert Half International, it was revealed that recognizing individual achievements was the primary reason why employees stay in their workplace (Smith, n.
d). Finally, company retention can be ensured by providing employees with opportunities for professional growth and career development. When an employee feels that there is no growth in their current workplace, their tendency is to leave and look for greener pastures. This was proven by an ASTD study which revealed that top companies conduct training to 86 percent of their staff as compared to 74 percent of average companies. Organizations that provided training to their employees yielded higher sales (Smith, n. d).