Employee retention is the single best strategy to save money and
time on recruiting and replacing employees.
If you can figure out how to keep your good employees you will significantly reduce the burden of staffing, recruiting and replacing employees. So stop giving money away!
First of all there are a couple of contradictory ideas here. If your principle job is recruiting, having lots of turnover is good job security...isn't it!
Second, if there do you really save money if you are getting rid of non-productive employees? Isn't replacing them better in the long run?
The short answer to both is keeping employees is better, cheaper and more productive than replacing them.
Here are some of the direct costs of replacing an employee;
Depending on the complexity of the job, this process can take at least 3-6 months in most cases.
In addition to direct costs of replacing an employee there are indirect costs. These are related to losses in productivity, slips in schedule, loss of corporate knowledge, lost opportunity costs etc.
It does not matter the nature of the position any job carries some of these elements. For example, if you are paying an assembler $15/hr, that is because you can have that assembler making goods that you can sell at a price much higher than that cost. In this instance say you make $5/hr off the efforts of that person. If you are missing that productivity for 2 weeks, that is $400 of profit not being collected. Add that to the direct cost of replacing that employee and you can see how it is better to keep than to lose and replace. The scales only increase the more complex the position.
The keys to retention simply put are based on an old friend we called SAM;
They appear in this order because in order to foster employee retention, you first need to satisfy the employees basic needs. Then you need to show appreciation for the work and efforts so you can motivate them to fulfill the objectives of the company.
That's it! Employee retention is as simple as SAM.
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