Talent retention is important. Unfortunately, a company’s focus may not turn to retention until it’s already an issue. This is a problem. Retention needs to be on your radar now so you can prevent issues from developing down the road!
Here are some more common misconceptions about retention to stop believing so you can get on the right path to creating a plan before it’s too late.
Myth #1: High pay and retention go hand-in-hand
While it’s hard to retain an employee without good compensation, money can’t do the job alone. Increasing a salary rarely increases job satisfaction. It can even decrease satisfaction if pay is increased in lieu of addressing a bigger issue.
Money only ranked 3rd for the reason employees leave their job, according to a BambooHR survey. So don’t believe the myth that if your employee is making a lot of money, they won’t leave.
What else can you do? A strong benefits package, room for growth, crafting strong relationships between colleagues, and great company culture can help. If you want to know what else your employees want, you can always ask in a survey.
Myth #2: Replacing an employee who leaves is an easy fix
Some companies think to themselves, “Hey, there are always people looking for jobs, so why should I worry?” While this may be true, there’s no guarantee that the new applicants will have the skills or the right cultural fit that you’re looking for.
Especially in today’s abundant job market, there are way more options for jobseekers to choose from. This is great for them, but not so great for employers because it decreases the eligible talent pool.
And finally, replacing a person is one thing, but replacing their knowledge takes time and money. When an employee leaves, they take 70% of their knowledge with them, leaving your company with a gaping hole that can’t be filled overnight with a new employee. This proves particularly challenging when replacing a high-level employee.
Myth #3: Employee development and training will make them more likely to leave
Worried that equipping your employees with new skills will make them more marketable to other companies and encourage them to leave? Employee development actually improves satisfaction and retention, so it’s a good investment. Also, employee training can actually make an employee more specialized to your company.
Similarly, making sure your employees have adequate responsibility and room to grow at the company will satiate a wandering eye. Both employee development and growth are important for making employees feel like they aren’t stuck in their position with nowhere else to go but to another company.
Myth #4: Turnover won’t impact profitability
While turnover is inevitable, that doesn’t mean it shouldn’t be a concern. Losing employees impacts your bottom line, namely because it costs money to replace them. Replacement costs are an average of 213% of employee salary (that’s well over $400,000 for someone making $200,000). And then there are the added costs of lost knowledge, productivity, opportunities and potentially current business.
According to research, companies with lower turnover can have up to 4 times greater profitability than companies with higher turnover. That’s not something to ignore.
Ready to look for a new tool for your proactive retention strategy? Consider Ultimate Health.