By Roxanna Coldiron
No organization can succeed without their employees. Whether the company is large or small, the employees drive the business through their efforts to meet and exceed productivity goals and fulfill the company’s mission. Retaining key employees and reducing employee turnover should be the goal of every organization, but how can companies measure their retention strategies and manage their teams better?
This is where retention management and metrics come in. The right combination of metrics can help can organization to manage their retention success and lessen the turnover rate, as well as help the company to achieve its overall business goals.
Employee turnover costs companies anywhere from $30,000 to $45,000 to replace an employee who had been salaried at $60,000/year, while replacing a key executive who makes $100,000/year can cost as much as $255,600 (Huffington Post). So, it makes fiscal sense to want to keep your employees around.
How can organizations measure their employee retention? Start with these key metrics:
New Hire Failure Rate
The new hire failure rate refers to the number of times a new hire might leave an organization within the first six months or year, for any reason. Examine the hiring process. Is the company asking the right questions? Why didn’t those new hires work out? Understanding this metric will help organizations improve their hiring practices and retain more employees.
In addition to measuring the new hire failure rate, organizations should keep track of the turnover rate. Did getting rid of flexible scheduling policies result in more employees leaving the company for other companies? Look for any connections that could reveal a cause behind the high turnover rates. Then seek to remedy the situation.
The best way to measure your retention strategies is to ask the employees themselves. Provide an anonymous survey for employees to give feedback on the company’s benefits, culture, and more. Then take the results and make any necessary changes to the workplace culture to promote higher employee engagement and satisfaction while also remaining in line with the organization’s mission and goals.
Diversity is very good for business. Differing backgrounds and skills can mean an increase in workplace creativity and innovation, and it promotes an inclusive workplace culture. Your customers tend to be diverse as well. That means that your workforce should represent the diversity of your consumer base.
Measuring the performance of new hires and long-term employees can provide insight into the effectiveness of an organization’s retention strategies. Performance can be measured by whether or not business goals are met, how long it takes for new hires to become independent workers, whether employees have career development, and whether employees have all the information and resources that they need to do their jobs.
Retention management and metrics can then be used to develop an effective retention strategy. Maybe offering unique benefits such as student loan repayment assistance or flexible scheduling and time-off policies can increase the engagement of employees and reduce turnover. Incentivizing talent and creating a good workplace culture can also improve employee outcomes.
Want to learn more about voluntary financial wellness benefits and how they can contribute to a increased employee retention? Request a demo today.