Source | blog-vantagecircle-com.cdn.ampproject.org | Thadoi Thangjam
Hiring the right talent is difficult enough. But retaining them is a whole new challenge. One of the first signs of an employee on the verge of leaving a job is disengagement. Creating a highly engaged workplace begins with having competent employee retention strategies.
Gone are the days when the employers held all the cards. Employees no longer feel compelled to serve companies that do not serve them. Thus, understanding employee retention is the key to retain those top performers.
What is Employee Retention?
In simple words, employee retention is the effort taken by an organization to hold on to its most prized asset – the employees! Moreover, a low or high employee retention rate directly impacts the company’s overall business.
It is also essential to know and manage your company’s employee turnover rate if you want to stay in business for the long haul.
Consequently, to manage and avoid high turnover, retaining key employees becomes a crucial element.
It is also an excellent practice to implement a data-driven staff retention strategy rather than firing point-blank. What I recommend is keeping an eye on the employee retention rate on a periodical basis. Mostly half-yearly or quarterly.
How do you calculate the employee retention rate?
Calculating the employee retention rate is simple.
- Choose a period.
- Divide the number of employees who stayed during the given period by the number of employees on the first day of the given period.
- Multiply it by 100.
To make things easy, you can use our employee retention rate calculator below.
Employee Retention Rate Calculator
10 Eye-opening Employee Retention Statistics You Should Take Note of
Employee retention and employee engagement are interrelated to each other. Employees who receive the growth and exposure feel motivated. They feel motivated and satisfied with their work and thus remain with the company.
Here are some eye-opening employee retention statistics that will give you a reality check of the workforce.
Herzberg’s Two-Factor Theory
Frederick Herzberg’s famous “Two-Factor theory” explains the relationship between employee retention and employee motivation.
According to him, two sets of factors influence motivation in the workplace. These factors either enhance employee satisfaction or hinder it.
First is the hygiene factor and refers to factors that enable motivation at a workplace. Hygiene factors are the physiological needs that the employees expect to be fulfilled. The absence of these factors leads to employee dissatisfaction.
The second are motivators. Herzberg says employee motivation is dependent on the conditions of the job itself. These factors motivate the employees to perform better.
Some motivational factors are responsibility, job satisfaction, recognition, achievement, opportunities for growth, etc.
But do you know what makes an employee quit? And what makes them want to stay with the company?
Before we dive into this, let me give you a quick glimpse of the Employee life cycle and where the retention takes place.
Employee Life Cycle
The first stage is when the company tries to attract potential candidates for the job. They gather a pool of applications for the next step, i.e., the recruitment stage. The most suitable candidate is then selected through the recruitment process. Then they are put under the orientation and onboarding process.
After that, they enter the development stage, where they are trained and honed for their respective roles. Once they are fully qualified, it becomes crucial to keep them motivated and intrigued with new challenges and roles. It will help them upskill in the development stage.
(Note: If you want to explore further, you can refer to this brilliant article on the Employee Life Cycle.)
But, there comes a time when the employee feels there is no room for further development in their current job. It is then the employee reaches the retention stage. This is where the employer tries to figure out how to retain employees with new ideas for staff retention policies.