The Great Resignation made everyone painfully aware of the costs of turnover. While the financial impact is certainly significant, the benefits of employee retention extend far beyond your organization’s bank account.
According to the Job Openings and Labor Turnover Survey, 3 to 4.5 million US employees leave their jobs every month.
Even if you’re able to replace these leavers quickly, new employees take an average of eight months to hit full productivity.
And let’s not forget that’s an average—for more technical roles or products, this will take longer.
It’s easy to focus on the downsides of turnover, but instead we’re going to look on the bright side. So what are the benefits of employee retention? Some of them may surprise you…
Of course, we had to start here. Hiring is expensive, which means the more you have to do it, the less money you have to spend elsewhere.
It’s not just that, though. It’s all the time it takes for your new hire to get up to speed. They’re starting at a lower level of productivity than the person they replaced, which means they’re not earning you as much money.
And other team members are bringing in less, too, because they’re spending time training their new colleague. Not to mention all the money you had to spend on the recruitment process to hire that person in the first place.
When employees stay, you save on hiring costs and training costs. And this money can be re-invested in other areas of your business, like expansion, new technology, or further increasing employees’ skills so that they stay even longer.
More workplace friendships
In 1985, 50% of US employees had a workplace bestie. Gallup found that it’s now down to just 20%.
Despite this, 46% of workers believe that friends at work are important to their happiness. Having a best friend at work also results in a 36% reduction in safety incidents, 7% more engaged customers, and 12% higher profit.
Plus, there are the additional benefits to employee mental and physical wellbeing, which extend far beyond your business and long into workers’ futures, too.
If there’s frequent turnover at your organization, there will be fewer friendships and you’ll see the impact across the organization. What’s more, the bonds that do form may be weaker since people only stay for a short time.
Strengthened workplace relationships that lead to better business outcomes is one of the most frequently overlooked benefits of employee retention.
A few years ago, I took a job somewhere working for someone I knew.
In the first week, a few people from different departments were let go, but we assumed our team was fine.
We were very, very wrong.
By the end of my second week there, the person who’d hired me had been let go, too.
So had several more people.
There was a revolving door of employees, leading to low morale and output. Nobody wanted to be there, but no one really saw a way out, either.
Every time someone was fired—often with little to no explanation—we all looked around, wondering who’d be next. Was it us?
Nobody felt able to speak out. Morale, mood, and confidence were all pretty low. All because we worked in an environment defined by fear.
When employees feel safe, they stay for longer, and—surprise surprise—they’re happier doing their jobs, too!
Better customer experience
Look after your employees and they’ll look after your customers, as Richard Branson famously said.
When your employees are happy, they’re more likely to want to make your customers happy, too.
When they hate their jobs, they’re going to go through the motions and do little to nothing else to uplift the people they deal with.
Moods of any kind are contagious, which means happy employees are more likely to leave your customers smiling, too.
This has the opposite effect as well, though. If someone is in a bad mood because of their job, they could take that out on a customer.
A couple of years ago, I was looking to update my phone contract. I called my carrier and shared with them some cheaper deals I’d found with competitors.
Despite having been this company’s customer for over a decade, the person I spoke to insisted they had the best coverage in the country (they didn’t) and that they couldn’t offer a cheaper rate (they’d done it before…).
And when I said I wanted to leave, he told me the wrong process.
While I had dealt with far nicer people from the same company in my ten years as their customer, it’s that experience that sticks out to me and caused me to hang up on him and jump to another provider ten minutes later.
One of the benefits of employee retention is that the effort you put into retaining folks will show up in their performance. It will create a self-reinforcing process: when you make your employees happy, they’ll make your customers happy. Obviously, that should then make you happy!
Since happier employees provide better customer service, is it any wonder that when employees stick around customers leave more complimentary reviews?
This has a ripple effect on your business, leading to more prospects and happier customers.
Most people research businesses before contacting them these days, which means the more positive reviews you have, the better.
How employees deal with customers is often one of the things highlighted in reviews, too. So you want them to leave a lasting, positive impression on the customer and anyone reading their review.
Growing internal knowledge and skills
Don’t underestimate the value of internal knowledge and skills, particularly in businesses with steep learning curves.
The more complicated your infrastructure is, the longer it takes someone to understand it all.
When employees stick around, they can train new people in how it works and hopefully get them up to speed faster.
Their deeper understanding also means they can help you find solutions faster, saving you even more time and money.
A growing institutional knowledge base is one of the most important benefits of employee retention in today’s competitive market.
The benefits of employee retention are virtually endless; there’s very little downside to retaining your top talent.
They have brand knowledge that will take time for a new person to learn. This knowledge can be the difference between solving a problem right away, or spending days, weeks, or even months scratching their head.
There’s also the impact it has on employee morale. When employees feel happy and safe in their roles, it rubs off on their colleagues and everyone works harder and collaborates better.
If you want to tap more deeply into the benefits of employee retention at your organization, consider incorporating some helpful tools. By ensuring every one of your team members can get fully immersed in all your employee offerings from day one, Workrowd makes it easy to drive retention and track what’s working.
Visit us online or send us a note at email@example.com to learn more. We love making employees happy just as much as you do.