4 Signs Your Employee Retention Rate is Below Par

All businesses rely on productive workers, and therefore have something to gain from optimizing their employee retention rate.

Keeping your staff happy and engaged in their work, and therefore less likely to look for career opportunities elsewhere, is particularly important for industries facing severe skills shortages.

By looking out for signs that retention is falling, you can take early, decisive action to protect your workforce and the business from unsustainable employee turnover.

1.    Negative workplace culture

A culture of negativity in the workplace can be both a cause and a consequence of sub-standard staff retention.

People frequently leaving can lead to feelings of uncertainty and insecurity among the rest of the workforce. The impact can be particularly significant if the individual departing is a respected leader or a senior team member who has acted as a mentor to others.

It's also important to consider the emotional effect of employees departing, if the colleagues they're leaving behind have become close friends. Research has suggested that workplace friendships make people happier and more productive, so bidding farewell to someone who has become more than just a co-worker could be difficult for remaining employees.

If you're starting to notice changes in atmosphere and attitudes in the workplace, it's worth looking into whether a high rate of staff turnover is a contributing factor.

It's also important to consider if undesirable aspects of your culture like unfriendly competitiveness , gossiping or bullying, are hindering your efforts to retain employees.

Improving the company culture will help you earn the loyalty of your most valuable workers. This could involve actively engaging with the workforce to get feedback on what needs to improve, conducting regular culture audits and placing a strong emphasis on trust and transparency.

2.    You're spending too much on recruitment

Recruitment can be an expensive business. There are many costs you might have to take into account when you need to fill a recently vacated position, such as:

• Advertising on job boards
• Recruitment agency fees
• Updating your employer brand or careers page
• Paying for tools like applicant tracking systems

You also need to consider the time and resource commitment involved in advertising roles, screening candidates and conducting assessments, as well as onboarding and training new recruits. The combination of these various expenses means the average cost per hire for employers is more than $4,000, but is likely to be much higher for executives, according to the Society for Human Resource Management.

If your recruitment costs are steadily creeping up and consuming more of your overall HR budget than you would like, it could be a sign that your retention rate needs to improve. Keeping your existing staff happy, engaged and dedicated to the business could be a wiser use of your time and budget than bringing in new hires.

3.    Productivity is falling

When someone leaves your organization, you're left with gaps in workforce capacity and capabilities. This often puts pressure on remaining staff, who might be asked to take on heavier workloads or assume new responsibilities while you seek a replacement. Even when a hire has been made, it will take some time for the new arrival to get up to speed and reach an acceptable level of productivity.

Furthermore, losing experienced, capable members of staff makes it more difficult to maintain a basic level of company and brand knowledge within the workforce. Senior employees who know the business inside and out have a vital role to play in supporting and mentoring their less experienced colleagues.

If you're concerned that staff turnover is starting to pose a threat to the basic productivity and competence of your workforce, it might be time to launch a dedicated talent retention strategy.

4.    Unhappy customers

People are crucial to the performance and success of every business. One of the simple reasons for this is that customer relationships are built on human communication and engagement.

When an individual who has spent years nurturing and maintaining strong bonds with your most valuable customers departs the company, you face the challenge of keeping those relationships stable, while also managing the internal impact of the person leaving.

If you're struggling with employee retention and clients are faced with a steady stream of new names and faces, their trust in your brand and your ability to deliver the results they need could diminish. This is another example of how failing to keep hold of your most valuable staff can have a material impact on the performance of the company.

Investing in efforts to build an engaged, loyal workforce will lay the groundwork for stable customer relationships and ultimately position the business for long-term success.