Turnover impacts more than your bottom line.
It’s already difficult to fill open technical positions. There simply aren’t enough talented people to go around. Let’s focus on this statement for a minute. It could be argued that any recruiter worth their salt can find you a qualified employee. But there’s difference between someone who’s a fit for the job, and someone who’s a fit for your company.
You’ll find plenty of people who possess the skills you need. Talent is a natural aptitude. It can’t be acquired. It’s why employee retention—especially those who align with your organization—should be high on your list of priorities. In fact, it should be your top priority.
Employee turnover: the company killer
The impact of high voluntary turnover is systemic. Take off those rose-colored company glasses and look closely at the morale of a staff dealing with this sort of environment. It crushes productivity, and there goes your bottom line. Low morale stifles innovation.
You might not be able to quantify morale and its impact to your bottom line, but you should be able to determine the cost of high employee turnover so you can compare it to the benefit of investing in keeping talented employees.
Unfortunately, many companies don’t know this cost. They don’t track it because the impact runs throughout a company—it’s not an HR issue. You have to measure lost productivity, lost revenue because of customer dissatisfaction, and lost expertise. Then there’s the more familiar costs of recruiting, interviewing, hiring, orientation, and training.
By the numbers
The Center for American Progress compiled research and case studies to come up with bottom-line impacts to companies. The average, CAP concluded, is about 20% of the employee’s salary.
Technical positions require higher levels of education and specialized training. The study found that these positions have a dramatically higher turnover cost, ranging up to 213%.
When an employee at any level leaves, their replacement will take anywhere from 30 days to a full quarter to spin up to optimal productivity.
Your company is run by people. Your customers are people. It’s people dealing with people. Customers are receptive to change. Relationships can be jeopardized by employee turnover. Or an exiting employee will take key customers with them to your competitor. No matter how it plays out, employee turnover gets noticed by your customers.
How to keep good people
Employees don’t necessarily lie to you when you ask them why they’re leaving, but they likely don’t want to level with you, either. They’ll tell you it’s because of salary or better benefits. Did they start looking because these things dissatisfied them?
Or is it because they didn’t feel appreciated?
Organizations compensate their technical talent well. Money isn’t enough. It’s not a retention strategy. You don’t have to get as crazy as the folks out in Silicon Valley, but retention is about rewarding—and rewarding your employees isn’t a one-size-fits-all proposition. You’ll figure out the specifics, but make the objective simple and compelling: Offer rewards that show your trust and flexibility.
Technology changes fast. People in this field are lifelong learners. Does your retention strategy take this into consideration? Your technical talent is looking for ways to stay current and to advance in their career. Ask them how you can help them stay on top of their job.
Waiting until someone tenders their resignation is not the time to discover they’ve been looking for a company that will show them more appreciation. The process of constant communication gives you ample opportunity to ask questions that will give you insight. Companies who retain their employees do so because they ask them what makes them stay.
You’ve probably noticed a theme here. Employee retention is crucial because the opposite—turnover—will kill your bottom line. Especially if you measure the full impact rather than just the obvious aspects. The benefits of creating successful employee retention plan can be measured as well. A Deloitte study found that companies who focused on building a “recognition-rich culture” had 31% lower voluntary turnover rates.
Take that number and multiply it by your company turnover costs. It’s what’s at stake if your focus is on talent acquisition instead of retention.
At Consultis, we’ve spent over 32 years building relationships and learning what makes for a successful partnership between employer and employee. Contact us today to find out how we can help you retain and keep the best technical talent for your business.