How to Retain Staff and Avoid the Cost of Replacing Employees
One of the biggest costs to any business is its people. The cost of replacing employees is extremely high, and although this fact is known by most, the true costs of replacing staff and having a high employee turnover rate are lesser known and understood.
In a climate where companies need to compete for the best talent, it's important for business owners and managers to understand the cost of replacing staff members and identify the strategies that will help them to retain their best employees.
Uncovering the True Cost of Replacing Staff
It costs an average of £30k to replace a single employee. Just let that one sink in…
On top of this, the overall cost of replacing an employee goes much further than monetary value alone. In fact, losing and replacing staff has a knock-on effect on most aspects of a business. Let's take a look at some of the biggest costs associated with losing and replacing an employee:
Lost knowledge and skill
Each time you lose a valuable member of staff, you lose all of their knowledge, skill and experience too. The value associated with these aspects is considerable, and there are many situations where an employee has learnt skills that are specific to their role within your company.
Roles can be labelled the same across different businesses, but each company has its own processes, structures, policies and systems in place, which means that not all skills are transferable.
This makes the process of replacing an employee far more complex than simply finding someone who has previous experience in a similar role. You might also struggle to find an individual who can carry out the role as well as the member of staff you have lost!
Lost productivity is one of the biggest costs associated with losing and replacing an employee. There may be a situation where your employee's notice period finishes and your business hasn't yet found a replacement, or your replacement employee cannot start as soon as you had hoped.
Not only does this mean that there’s a period of time when the role is not being fully covered meaning other team members will have to pick up extra work, but there’s also the consideration of the amount of time it’s going to take to locate and recruit someone to fill the vacated role. Both of these factors combined can hinder the productivity of any number of teams within your business.
Even in situations where a replacement employee starts straight away, it takes a while to bed them in and a lot of training to bring a new employee up to the same speed as your previous employee. Remember, lost productivity is costly to any business!
Increased workload for remaining staff
Unfortunately, losing an employee often has a knock-on effect on other members of staff. A vital member of staff departing your company can have a detrimental effect on team morale.
Not only might they be losing a colleague and friend, but someone has to pick up the work that they’re leaving behind, meaning increased workloads for your existing employees.
One of the unfortunate costs of replacing staff is the training costs associated, both in terms of money and time. It's extremely time consuming to train a member of staff and is even more costly to your business due to the lowered productivity levels during this time.
How to Retain Your Best Employees
Now that we've instilled a sense of fear into you (sorry!), let's look at the things you can do in order to ensure you retain your best employees.
A great place to start is to consider the reasons why many employees leave and move to a different company. Inc. Magazine found that the most popular reasons for quitting were:
- Career advancement/promotional opportunities (32%)
- Pay/benefits (22%)
- Lack of fit to job (20%)
- Management or general work environment (17%)
- Flexibility/scheduling (8%)
- Job security (2%)
With this in mind, here are some insights into how to retain your best employees:
1. Offer an Inspirational and Flexible Work Environment
Employees want the full package, and the office environment has become a powerful tool for attracting and retaining the right individuals to your company.
Businesses are becoming increasingly competitive with the environment they offer to their team, and the statistics from Inc. Magazine show that 17% of people leave due to their work environment, indicating its importance to employees.
By offering these to your staff, you can provide them with an environment that they enjoy working in and one that helps them to produce their best work.
2. Support Career Advancements
One of the biggest reasons for someone leaving their job is to make a career advancement.
Naturally, most employees want to develop and move up the career ladder, and if you offer them an opportunity to do this within your company, you’re giving them less incentive to feel the need to look elsewhere.
It's important for you as an employer, or manager, to provide top-performing team members with opportunities to advance in their role.
Promoting from within also becomes a great selling point for you as an employer as it becomes somewhere people feel they can learn and grow, which helps your business to attract great talent.
3. Provide a Competitive Salary
It's not surprising that salary is a huge contributing factor to employees moving jobs. It's a given that there will always be a company offering more than you, and you might not be in a position to meet the highest salary on the market, but paired with good opportunities to grow and a great environment to work in, you can come out on top with a stronger overall package.
4. Offer Flexible Working Opportunities
The demand for flexible working is on the rise, and many employees are favouring companies who offer it!
Flexible working gives staff members some autonomy when it comes to when and where they work, and it allows employees to better fit their job around their personal lives.
The advancement of technology has made it possible to complete any number of roles from just about anywhere on the planet… providing there’s an internet connection of course! This gives your employees the freedom from not being restricted to a static workstation for 9 hours a day and you may just find it helps you to get more out of them on the whole.
Do you have flexible working policies in place? If not, it could be a consideration worth making.
It’s painfully clear that the cost of replacing staff is extremely high across the board, but you’re also at an advantage in that you have an insight into the common reasons for employees leaving their jobs.
Take it on-board to better your workplace and provide your staff with a job they don’t want to leave!
We work with many office-based clients to shape them with an office space that increases productivity and looks after the health and wellbeing of those working in the space. Take a look at our projects for some inspiration or get in touch to talk about your workspace!