If someone leaves a company, it's not just a case of having to goottomline goes too. How can these valuable assets be persuaded to stay? through an increasingly difficult and time-consuming search and recruitment process. The financial costs vary, but can be as high as one or two times the defector's annual salary.
And that's just the financial cost - look at the impact on areas such as morale, productivity, customer confidence and so on, and the real cost can be much higher. One US financial institution estimates that for every 10 managerial employees that leave, it loses $1 million in revenue.
When employees begin to consider changing jobs they weigh the benefits of staying versus the benefits of moving on. Every employee's job-delivered value is different - a complex mix of money, perks, work environment, company culture, attitudes, career development, employee relations and quality of life.
The challenge facing a business is to create a situation where every employee can get a balance of these factors that convinces them that there is more value to remaining with the organisation than moving to another.
Retention begins at the front door, when a company hires its staff. It will only retain - or want to retain - employees when there is a good fit between those employees, the requirements of their jobs and the corporate culture. If there's no fit they simply won't work out - they'll either become a liability to the team or they will leave. Either way, they will cost the firm money. Smart companies don't hire out of desperation. The people doing the recruiting need to be sure that they use a hiring process that allows them to 'hire smart', - fitting the right employees into the right positions.
Once the right people are in place, companies will now want to use all approaches that they can to retain them. Different people value different things, so businesses have to provide a variety of benefits that will outweigh what they might gain by moving on. Using 'velvet handcuffs' means locking people in with whatever positive benefits companies can deliver.
Money continues to be a way of getting attention in the job market, but it's not enough to assure retention. A study by US firm Positive Directions found that 'money wasn't really a determining factor to most people'. However, money is always an issue - salaries must be competitive and fair for the skills employees possess. While lots of money won't necessarily retain potential defectors, a lack of it will help their decision to move.
Employee orientation is another key factor. Research shows that long-term employee loyalty is dramatically improved when they are properly inducted into the company. All successful organisations provide formal employee orientation sessions lasting from a few hours to a few weeks.
In these sessions, the employee is introduced to the company, its philosophies and procedures, and is made to feel part of the team from the outset.
All employees want to feel they are part of a winning team, and that there is an opportunity for them to advance within the company.
If that is a possibility, companies should work with them to create career development plans. If that opportunity simply doesn't exist, it's particularly important for employers to provide alternative opportunities for employees to advance themselves and their skills through ongoing training.
According to a trainer at Dale Carnegie Training: 'Companies are providing personal development and training programmes as value-added perks to employees, not simply as aids to development of specific job-related abilities.'
There is much talk nowadays of the difficulty in finding childcare in an era when it is increasingly essential that both partners in a relationship bring in a salary. Flexibility can often be a significant bonus for people in this situation.
Companies should look for opportunities to provide flexi-hours, work-at-home periods, teleworking, job sharing, and even more holiday time.
Managed properly, this can be a relatively inexpensive but extremely valued perk.
The goals and progress of the company should also be shared with employees.
It is vital that they know what the company is trying to achieve, why, against what competition, and what part they are expected to play in its plans. They need to be regularly updated on how things are going - be they good or bad. People need to know how their future is progressing, and if a business does things right, then the organisation is their future.
Recognition - both formal and informal - is another factor that costs little but has a high value to many employees. Mary Kay Ash, founder of Mary Kay Cosmetics, says: 'There are two things people want more than sex and money - recognition and praise.'
Employee of the month type schemes, that give bosses an opportunity to hand every employee their 15 minutes of fame, should be considered. Also, managers should actively look for opportunities to praise employees - frequent one-minute praising makes a remarkable difference to employee morale.
A successful business should be one where people happily manacle themselves to its future. A company should lock in its biggest assets - its people.
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