Employee turnover can run up massive costs for your company, leaving you wondering where your profits went at the end of the year. What makes employees leave, how much is lack of retention really costing you, and what can you do about it?
Average cost of hiring a new employee
Think twice about firing that underperforming employee – the cost to replace them (and the one after them, and the one after that!) could be more than simply investing in your onboarding and training process.
According to a CAP study it was revealed that the average cost to replace a worker is more than 20% of their salary. When you take into account that 30% of new hires leave their job in the first 90 days… Ouch!
It gets worse. That’s just your run of the mill employee. The same study noted that executive positions have even higher turnover costs — up to 213 percent There’s hope, however: high rates of turnover can be lowered through changes in workplace policies. Investing in employees is the number one thing you can do to set your company on the road to long-term retention.
According to LinkedIn’s 2018 Workforce Learning Report, a whopping 93% of employees would stay at a company longer if it invested in their careers. Your employees want to know that you think they are worth keeping around. When you show them you value them enough to properly train them and provide them opportunities, they are less likely to leave.
The Society for Human Resource Management (SHRM) noted that Generation Z employees say returning to school and low base salary are the most prevalent reasons for leaving a job. Their idea is that pursuing the first (more education) can lead to improvement in the second (pay rates). If you help train and educate employees, your retention rates can go up simply because they see a path forward to a better future if they stay with your company.
How can you improve employee retention?
According to Qualtrics, 60% of U.S. employees say they have a way to provide feedback about their employee experience. While workers who are given opportunities to provide feedback about their experience are somewhat less likely to leave, only 30% of U.S. employees said their feedback is acted upon by their employer.
The workers who feel listened to and that their feedback makes a difference have a huge advantage. Employers who say their employer acts on their feedback are four times more likely to stay at their current job than those who feel their feedback is ignored.
Providing opportunities for employees to give you honest feedback, and then implementing what you can, will build trust. Your employees will feel that their input is valued, and that you really are listening.
Another thinkpiece from SHRM points out that about one-third of the new hires who quit in the first six months of employment say they had skimpy onboarding or no onboarding at all. Half as many said that the lack of good onboarding was a factor in their decision to quit. Onboarding pays off – 58% of employees who receive proper onboarding are likely to still be at the same company 3 years later.
Your onboarding process can be critical to keeping new employees feeling valued and happy. Make sure you are onboarding before your employee’s first day, and continuing to onboard for at least the first ninety days. Frequent employee check ins can provide them with the ability to provide feedback. You can match feedback between employees to see where there areas that can benefit form change. Multiple comments about the same thing means there is an opportunity for improvement — and that the improvement would be noticed and appreciated!
Improving your onboarding process
You can improve your onboarding system by streamlining and automating it. Implementing an intuitive onboarding process that puts all documentation in one place allows your new hires to complete mundane steps quickly. This leaves you more time to spend on making their early company experience positive.
Make it personal
There’s no “one-size-fits-all” approach to onboarding. When you follow these five simple rules for personalization when onboarding new employees, you can boost their productivity by 25%.
Using modern technological tools for onboarding can improve employee retention and cut employe turnover costs, allowing you to scale your company faster. Treat each new employee as a critical part of your long term plan, and invite them to help you plan your company’s future.
Lead by example
Employees don’t really need managers – they need leaders. When you shift your focus from telling employees what to do to showing them what to do, your company undergoes a positive transformation.
Ready to stop losing employees as quickly as you hire them? Invest in your company’s future and your employees today with Trainual. It’s the onboarding system that makes a difference.