Employee Retention

By Megan Ware, Director of Workforce Development, UMA

Employee retention is one of the biggest issues currently facing our workforce. It’s not just about keeping employees happy, it’s more about retaining your talent and keeping them with you as long as possible. Employee turnover is part of any business. The ability to retain employees from day one helps reduce the hassle of onboarding employees and reduce the waste of time. The higher your turnover rate is, the more costly and detrimental it is to a business. Entry level employees can cost upwards of 50 - 60% of their annual salary to replace.

Employee retention helps boost morale, reduce costs, maintains strong and consistent customer experience, and reduces overhead.

How to retain employees is a question I hear almost every day. Whereas, I have no magic answer, an employee that feels valued by your organization and has opportunities for growth and training is much less likely to leave. Trending numbers say that 76% of employees that do not feel valued will look for another job opportunity. A recent workplace survey report found that 94% of surveyed employees responded that if a company invested in helping them learn, they would stay longer.

Investment in learning opportunities can span from training programs to mentoring. It is important to offer these types of opportunities so that employees feel they have something to look forward to. If these aren’t offered it’s likely it will come to a point where they leave, as they just don’t see a future in your business.

Another thing to consider are career paths and career ladders. These are traditional methods that illustrate to employees a method to develop and progress within an organization. Employees are generally more engaged when they believe that their employer is concerned about their growth and provides roads to reach individual career goals while at the same time fulfilling the company’s mission.

What is employee retention worth? It costs approximately 6 – 9 months of a worker’s annual salary to replace him or her if they leave. So, for an employee that earns $60,000 annually, that comes out to $30,000 - $45,000 in recruiting and training costs. The average retention rate in manufacturing is right around 71% annually. It is important to remember that retention rate and turnover rate should both be measured to gain a full picture of how your company is doing over year.

While collecting data is the first step, the real work begins when you identify what needs to be implemented to improve your strategy. The most common reason for high attrition rates is when employees feel they are not being given enough opportunity to grow professionally within the organization. If training for new skills, or opportunity to learn from mistakes doesn’t happen, it will lead to loss of talent.

Loss of talent can ultimately impact your company’s reputation, cause an increase in spending, and hinder workplace culture. Losing high contributors within your organization can be demoralizing and discouraging, it should not be underestimated the profound effect it can have on the colleagues left. Whether it’s loss of camaraderie, or the absorption of the work to compensate for the lost employee, it can cause extreme frustration and further damage the ability to retain employees. Having discouraged employees is every organization’s worst nightmare. Investing in your employee experience is critical for the long-term success of your organization.

Megan Ware, Director of Workforce Development, Utah Manufacturers Association