Employee resignation has always concerned many human resource managers and company owners. But the past couple of years have been especially concerning due to the increasing rate of employee attrition rate all over the world, and experts are saying it’s about to get worse.
Research agency Gartner is forecasting a further 50% to 70% increase in employee resignations. On top of this, hiring replacements is now 20% longer than before the pandemic. People are leaving, and it is becoming increasingly difficult for companies to maintain operational efficiency during all these departures.
The good news is that many of these resignations are highly preventable. For this to happen, the organization must focus more on retention than hiring. Interestingly, compensation and benefits rank low among the factors that trigger resignations. Instead, the top two reasons that can make employees stay longer in a company are work-life balance and recognition of good performance.
So rather than spending all your time and resources in recruitment and training, you should allocate a portion of it for employee of the month award ideas instead. Here are the reasons why it is essential to focus on employee retention:
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Efficiency And Productivity Suffer When Employees Leave
When an employee resigns, your company loses more than just talent. Work efficiency and productivity will also likely deteriorate because the new person will need time to understand and get used to the office culture and operations. In contrast, having long-term employees lead to smoother operations and better performance because everyone already knows what to do.
The negative impact increases if the person leaving is in a senior position and has been with your company for a long time. With their experience and expertise, seasoned employees would have better and faster outputs than those who have just joined the company. They have also developed a certain level of trust and relationship with their co-workers, which would help both parties execute their tasks with greater competence, while the newcomer will have to start from scratch.
It Is Expensive To Recruit And Train New Employees
Turnover forces the company to spend significantly on new employees and train them for the job. For one, the cost to advertise vacancies is already not low, not the mention the number of hours it will take for your human resource personnel and related managers to conduct interviews and manage other onboarding requirements. These are actual and valid expenses that your organization has to absorb whenever a skilled employee resigns.
On average, filling one vacancy would cost about 20% of an employee’s annual salary, but it can go higher if the position requires technical knowledge. Should your company decide to lure away talent from an existing job, the cost could go as high as 100% of the employee’s annual wages. When employees choose to stay with you, the company gets to save on these expenses, plus you are assured of good performance since they have been on the job for a long time.
Vacancies Cause A Strain On Remaining Employees
It often takes a few weeks to fill in a vacancy. During this time, the remaining staff will have to pick up the slack while also training the newcomers, which can cause them additional stress and fatigue. They may even be forced to work overtime to catch up on the remaining work, which can eventually lead to burnout.
The longer this setup lasts, the higher the chance the remaining employees might quit their jobs. This will result in a never-ending loop where your company will keep hiring while the employees keep leaving due to the stress created by the vacancies. On the other hand, employee retention programs will boost employees’ morale and make them feel good about their jobs. This decreases the attrition rate, which means that the employees will not need to overextend themselves to cover up for the staffing deficit.
Customers Can Feel The Difference
Whether the position is filled immediately or not, the effect will be felt by your customers either way. It takes time to get to know a customer’s habits and preferences, and a new person will not be able to achieve the level of understanding that a seasoned employee has, at least in the first few months. Neither will the remaining employees be able to provide the same output level as the previous person because they are already splitting their time between their original duties while taking over additional tasks.
By encouraging people to stay, you can ensure no gaps in customer service. You can even devote more time to improving your products and services since your seasoned employees would have enough experience and customer knowledge to pinpoint areas for improvement.