Salary does not buy employee loyalty.
These statistics rub up against our common assumptions. The majority of the reasons that people quit are entirely under the control of the employer and all related to employee engagement to some degree.
Employee retention is about enticing and motivating staff to stay with your company long term. It’s about building strong relationships—filling workers with a sense of accomplishment, pride, and mutual respect that drives long term loyalty.
You can’t talk about employee retention without mentioning the opposite phenomenon: employee turnover. Also known as employee attrition or churn. In short, the number of people that leave your company per given period, for whatever reason.
If a business is looking to reduce the number of people leaving, they must aim for a quantifiable goal. In other words, they must determine a benchmark or goal the company will aim to maintain when it comes to turnover.
That said, losing some employees is inevitable, so you’re probably wondering what the average (or “ideal”) retention rate is.
A general rule of thumb: turnover rates should ideally be lower than 10%, which is a very healthy turnover rate across the board.
Keep in mind, turnover rate can vary widely from industry to industry, which may influence the benchmark you should be aiming for. If you’re curious to know more about turnover rates specific to your industry, check out this useful tool from Nobscot.
When you think about past employer(s) that you committed to for a longer-term, let’s say over 2-years, they probably have some things in common.
These organizations probably did an excellent job of providing you with the following:
Companies that provide a vibrant and dynamic environment can do so because a healthy organizational culture and employee satisfaction are a strategic priority. These companies think long-term. Even though investing in employees may utilize more time and resources upfront, the long-term benefits are undeniable.
For example, it’s reported that businesses that strategically prioritize company culture and employee happiness yield 4X the return on investment.
Also, a notable Gallup Workplace meta-analysis reports that teams who score in the top 20% in engagement realize 59% less employee turnover. Engaged employees show up every day with passion, purpose, presence, and energy.
Job-hopping might statistically be at an all-time high. But the numbers fail to tell us anything about why people job hop, nor anything about the repercussions on people's mental health. In short, are people truly happy?
Assuming all employees are job hoppers and treating them as a short-term asset will only succeed in perpetuating the very thing organizations are trying to avoid—turnover.
Painting all employees with the same brush further drives what economists are calling the “quitting economy.”
If an organization is aiming to keep turnover low, they must work toward building a work culture around a central mission and philosophy that strategically prioritizes employee appreciation and satisfaction.
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