The Hefty Price Tag of Poor Retention Efforts
Carl worked at his previous role for quite some time, and on the outside everything looked fine, He made decent money, genuinely enjoyed his work environment and colleagues and was consistently ranked as the top seller for the business.
Lisa was friends with everyone else who worked at the gym and got along very well with her manager. She had clients who sang her praises.
So, I wondered what could lead two seemingly satisfied workers to suddenly quit their jobs. And the answer, I soon discovered, was a lack of career advancement.
Sure, making money and enjoying their work cultures were important to my two friends, but both chose to look beyond the surface, focusing on the bigger picture—and that image didn’t depict them moving forward.
Carl’s employer consistently failed to promote him (and a few others), keeping many tenured workers in the same roles they occupied as new hires. And the structure of Lisa’s gym made it difficult for her to climb up the ropes as a physical trainer.
Both of my friends’ actions proved that the old saying is true: All that glitters isn’t gold.
This led me to think about how more and more employees are quitting their jobs, and many times this comes as a surprise and shock to their employers.
And to help ease my (and many employers’) thoughts, LinkedIn has recently produced an infographic, “Employees Overboard: Why Employees Jump Ship and How Much It’s Costing Companies.” The graphic derives from LinkedIn’s Exit Survey, surveyed 7,530 LinkedIn members across the US, Australia, Canada, India and the UK who recently changed jobs.
“Companies across the globe are grappling with talent shortages due to the skills gap and scrambling to snatch the best and brightest from the workforce,” LinkedIn’s Matt Grunewald writes about the survey results. “Tempted by the prospect of landing a better gig, more and more employees are weighing their options — 85% of the workforce (up from 80% in 2012) is either actively looking for a job or open to talking to recruiters about relevant opportunities; even the ones who are “satisfied” with their jobs.”
The survey asked “gainfully employed professionals” what would convince them to change employers. Their top three reasons included:
- Better compensation/benefits
- Better work/life balance
- Greater opportunities for advancement
The survey also asked professionals what actually compelled them to change employers, and their top three reasons included:
- Greater opportunities for advancement
- Better leadership from senior management
- Better compensation/benefits
With 10.3 percent of turnover that was voluntary and preventable, the U.S. had the second highest annual turnover rates out of all the countries surveyed. And this no. 2 position is a costly “honor.”
The infographic explains that, in the U.S., an employee who makes $50/k annually equates to $75 million in average costs of preventable turnover to an employer. It also explains that if a business were to reduce turnover rates by a mere 1 percent, the company could save an average of $7.5 million a year.
I’m sure both of my friends’ managers were shocked to hear of their resignations, but perhaps their employers would have been a little more prepared if they had placed a better effort on retaining staff.
It could be as simple as conducting stay interviews, surveying workers, or even making an effort to check up on your workers—their progress toward their goals, engagement levels, work-life balance, etc.—every couple months or once a quarter just to continuously gauge your staff’s engagement and discover red flags for turnover.
The numbers do not lie; turnover is costly. But ensuring your company has an effective retention strategy in place can help reduce the amount of employees your business has going out the door—and the dollars that follow them.
