by Sellick Partnership | 9 August 2016
Employee retention is affected by so many variables, and it is more crucial than ever to find and implement successful employee retention strategies. Whether your business is thriving in a growth market or struggling in a sector where share prices are plummeting, attracting and retaining talented employees is key to long-term success.
In our three part series on employee retention we will explore some of the key issues employers face as a result of having a high turnover of staff, the reasons employees decide to leave in part two, and finally examine the solutions and strategies employers should consider when implementing employee retention measures.
The issues facing employers
1. Knowledge loss or “corporate amnesia”
The ability to successfully respond to change is a common challenge that businesses face, and requires a competent, competitive and committed workforce to adapt and manage. The implications of high staff turnover can be substantial often having a wider effect on overall profitability and success.
Organisations are at risk of losing knowledge as a result of poor staff retention, a concept often referred to as ‘corporate amnesia’. Losing experienced workers due to retirement, bad management or an influx of untrained talent, can lead to a loss of information and valuable resource, leaving an organisation vulnerable to change. Regardless of new recruits’ age or level of experience, if an effective handover and training programme is not completed essential knowledge and critical skills may be lost. The concerns also apply for a constant influx of new staff in a growing business. Younger, less experienced staff may view a role in your organisation as a stepping stone for career progression, and have no plans to stay for any length of time. If this is the case, a regular flow of new employees coming through the business will cause disruption and may lead to a loss of knowledge or ‘corporate amnesia’.
2. High staff turnover is costly for business
Sometimes losing a member of staff cannot be avoided due to personal circumstances such as retirement or maternity leave. However if staff do decide to depart to further their own career, their actions can often have a detrimental impact on the business. If a departing employee attempts to take their customer base with them, customer loyalty is at risk and could result in loss of revenue. This can often be the case in the legal and financial professions due to the level of trust the client and employee build over time. Losing senior legal or finance professionals can therefore have huge cost implications to an organisation, not only through loss of business, but also through the cost of having to retrain, and the time needed to rebuild relationships with both internal and external stakeholders.
3. A negative effect on your brand
Corporate image, or reputation, describes the manner in which a company, its activities, and its products or services are perceived by outsiders. In a competitive business climate, successful businesses actively work to create and communicate a positive image to their customers, shareholders, and the general public.
The main stakeholders contributing to an organisations brand image are its employees, and a high turnover can often be seen as a warning sign that the brand or company is experiencing significant challenges. Any issues with your brand image or reputation can directly affect your bottom line, especially in recruitment where trust and reputation are key to being successful. Candidates, clients and customers will partly base their purchasing/supplier decisions on trust, and if this is in any way jeopardised, current and future sales are likely to suffer.
4. Team dynamics and culture
Businesses that have a high staff turnover can often find it hard to build and maintain a culture that is attractive to employees. The existing workforce may find it increasingly difficult to develop a positive team dynamic due to the amount of change. Business leaders therefore need to ensure they have a solid management team in place to implement strategies, and help build and maintain a positive internal employer brand.
A business needs to run smoothly to succeed, so having a reliable team of employees that can learn and work together efficiently is essential, and necessary to be successful in most professions. Recruitment is an excellent example of this. Sellick Partnership would not be able to function if the team did not pull and work together efficiently, and it is the role of the senior management team to ensure they have the support needed to succeed. Professions in the legal and finance sectors are particularly challenging, and there is a constant stream of new practices and legislation to follow. Building strong relationships with clients and candidates is key. It is therefore imperative for the recruiters at Sellick Partnership to work closely together, ensuring all bases are covered, and our clients and candidates are given good and reliable service. The staff that work in recruitment are essential, as with any business, and without a strong internal culture and good leadership building this team dynamic is difficult.
Team morale and motivation is often be affected by a high turnover of staff in the business, as it leaves very little time for new workers to become accustomed to the business, and can cause resentment with experienced staff having to train and welcome new recruits. Existing employees can be left in limbo waiting for new workers, and may need to constantly adapt to new personality traits joining the team that can slow down and hinder a positive working culture being achieved. A constant influx of new staff also means a need for continuous ‘on-the-job’ training, which other long-term staff may find frustrating if it directly affects their ability to work and succeed in any way.
Employers need to act quickly
It is critical that organisation’s quickly identify any issues around employee retention in order to remain competitive and to be successful. As well as identifying the issues they will face, employers need to carefully look into the reasons why employees leave. Exit interviews can be extremely useful in this instance to understand the motivations behind and reasons for an employee leaving and can provide the company with constructive criticism.
Staff needs can differ from person to person, and generation to generation, whether you are a young graduate motivated by money and career progression, or a more experienced worker looking for a better work/life balance. It is crucial for employers to identify what will and what will not motivate their team and adapt to ensure retention of key staff. Employers need to be creative in how they approach employee retention. The current steady economic growth and a growing business confidence is driving recruitment activity in all sectors, and competition for skilled workers is fierce. Businesses that do not maintain their positive brand image or that have issues with an inexperienced, untrained workforce could be doing a disservice to themselves
Our next post in the employee retention series “Employee retention: why do employees leave”, will look at some of the reasons behind the departure of workers in order to determine the root cause and potential solutions to the retention game.