It’s in your company’s best interests to try and keep them there. Retention is the art of ensuring that this happens. Retaining staff can also save money and help achieve your company’s strategic goals with less disruption.
Your company turnover
The goal of retention is to keep staff within your company. This is partly because of the high costs involved in recruiting new people, including:
- administration around resignations
- paying contractors to cover work whilst there’s a vacancy, if applicable
- hiring a recruitment agency, if you use one
- training a new employee
But cost isn’t the only concern. The departure of some staff can have a more damaging impact on your company. Those who have specialist skills, or close relationships with clients or customers, can be difficult to replace.
On the other hand, high turnover is normal and expected within some industries, especially those that employ low-skilled and casual workers.
Calculating turnover and retention
Employee turnover refers to the proportion of employees who leave an organisation over a set period (often on a year-on-year basis), expressed as a percentage of total workforce numbers.
Employee turnover for a given period is usually calculated as a percentage using a simple formula:
No. of people who left your company x 100 /
Average no. of people employed
You can also work out your retention rate at a given moment using this formula:
No. of staff with service of 1+ years x 100 /
No. of staff employed 1 year ago
Why staff leave
Every employee will have a different reason — or combination of reasons — for leaving a company. Some of the most common factors are:
- Poor relationships with line managers or colleagues
- An offer of a job with better rewards
- Disengagement with the company’s objectives
- Lack of opportunities for professional development
It can be difficult to pinpoint exactly why staff leave. To help find out, your organisation could use tailored exit questionnaires or interviews. These are ideally carried out by an HR representative or impartial staff member, to ensure the most honest (and useful) answers possible.
Ways to retain employees
Clearly, addressing the most common reasons for leaving (listed above) can be a first step to retaining staff.
In general, retention relies on keeping your people engaged, motivated and well rewarded. Some other measures that companies take to retain staff are:
- Ensuring there are opportunities for development and progression at all levels
- Giving staff a way to vent concerns and give constructive feedback
- Allowing flexible working patterns
- Making sure that staff are treated with fairness and not obliged to work longer hours than necessary
Employee departures can be a good thing
When someone leaves your company, it’s not always negative. For example, it can create an opportunity to replace a staff member with somebody who has more up-to-date skills or a fresh perspective on the role. It can also give smaller companies a break from paying a salary if times are tight.
If the individual is retiring, finishing a specified contract, or leaving to change their life path, it can be a positive experience. When staff leave with fond memories, it reflects well on your company, and you can encourage this by celebrating the departure in a supportive way.