To a large extent, employees are responsible for the success or failure of any business. Your staff’s overall productivity is what customers and partners use to gauge the quality of your brand.
The hiring process, regardless of how rigorous it might be, can never guarantee that a candidate will be a perfect fit for the job. This is why hiring new employees is easier than keeping good ones.
Unfortunately, hiring new staff is more expensive than keeping the competent hands you already have, but the latter is more challenging than it seems.
However, appreciating employees for their contribution to the survival and success of the company not only makes them stay but also encourages them to contribute more, thereby improving their productivity. This can be as simple as presenting them with appreciation trophies.
This article will explore ways business owners and company executives can promote an appreciation culture to improve employee retention.
Dangers of poor employee retention
Employee retention is the ability of an organization to keep its productive and talented workers by fostering a positive work environment and promoting effective engagement.
Whether you are a startup or a big business, it is vital to keep your good employees. Companies that fail to retain their best employee often experience several poor business outcomes, such as:
High employee turnover
Workers tend to leave a company where they are less appreciated or underpaid for another with a better offer and work environment. It has been estimated that over 38 percent of employees quit within their first year.
It will cost you about 33 percent of an employee’s salary to replace them. Considering the average annual salary across the US is $59,428, a company will spend about $19,611 to replace each employee who leaves. This is without factoring in the damage their absence might cost your company’s reputation as the lack of their contribution might affect other departments and thus overall productivity.
Poor productivity
If your company’s culture does not encourage employees to stay, they will likely be disengaged at work. According to a Gallop report, disengaged employees cost the world $8.8 trillion in lost productivity, equivalent to 9 percent of the global GDP.
Even when they leave and are replaced, it will take a new year almost 12 months to become fully productive.
Organizational culture instability
Employees who have worked together over a long period tend to bond and understand each other better. This fosters effective collaboration and significantly reduces task completion time.
However, a company with poor employee retention will likely always have new employees joining the team every time. This can result in poor collaboration as the employees will be less optimistic about bonding with the new hire as they wait to have another person on board after the new one quits like their predecessors.
Poor customer service
Companies that can retain their employees usually find it easier to keep their best customers.
First, a high employee turnover will result in fewer staff responding to customers’ queries, which may make them lose faith in your brand.
Likewise, experienced employees are usually better at handling queries than newly trained, hence better customer satisfaction.
Weak competitive strength
It is very common for companies to hire from their competitors and vice versa. Therefore, whenever your employees quit, they are likely going over to your competitor and, sometimes, with your trade secret, which can drastically reduce your competitive strength.
Leveraging employee appreciation to boost retention
The best time to encourage your employees to stay is when they have never considered leaving. It has been discovered that 50 percent of employees who accept a counteroffer eventually leave after 12 months.
Aside from being well paid, employees want to be appreciated. Generally, every human wants to be valued and appreciated. It helps to reinforce a positive sense of self-worth.
Employees who feel their employees do not appreciate them are 34 percent more likely to quit within 12 months. Meanwhile, a report by Pew Research indicated that 57 percent of employees in 2021 quit their work because they felt disrespected and not valued by their employers.
One way to appreciate your employees is by paying them well and approving performance bonuses. Another way is by presenting them with recognition awards such as appreciation trophies.
Whenever there is an opening for a superior position, it is better to promote within than hire from outside the company, except it is inevitable.
Also, recognize nonwork-related achievements such as celebrating them on their birthdays, wedding anniversaries, baby showers, or house warming’s. This can help build a stronger connection. However, this should only be done when the employee is comfortable with it. Staff who prefer to keep their private life private should not be forced to share.
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