How to slow down your business’s attrition rate
Successful businesses put attention toward slowing down their attrition rate.
Your brand new recruit is the perfect fit. They are living your values, mastering your systems and the time and money you spent recruiting them is paying off. But did you know that they are probably already planning their next move? One in four new recruits will leave an organisation within six months and over 50% of people will leave within two years.
What about your existing employees? Some are likely to stay with you long enough to advance their career, but less than half of them believe this option is a possibility.
What does this mean for you and how do you stop your people from disengaging with you before it’s too late?
1. The (preventable) cost of employee erosion
It is estimated that staff turnover costs up to 150% of a person’s annual salary. In an organisation with 100 employees, an average salary of $75,000 and staff turnover of 9%, that equates to around $1million per annum. This figure accounts for recruitment, induction and the loss of productivity during the on-boarding period. You will be alarmed when you take a look at this number as a percentage of your overall profit line.
2. Money is not enough to save them
Only 38.6% of people jump ship for better pay. The good news is keeping your people is largely in your control and with the right mix of recognition, communication, shared values, motivating tasks and career advancement opportunities, your people are more likely to stick around and give back over and above what you have invested to secure them.
3. Your managers influence the destruction
Managers have the greatest opportunity to lead by example and drive a team of engaged employees, yet 24% of employees disagree with the statement, “My manager motivates and inspires me”. Engaged employees are more productive, deliver higher profits and are less likely to be tempted to leave your organisation, so it makes sense to keep your managers in check and equip them with the training and resources they need to lead a highly engaged team.
4. Do unto others…
Don’t expect loyalty from your people if you aren’t offering them the same courtesy. Show your employees that you respect and have trust in them and they will reciprocate by sharing their skills and ideas, and will be more willing to commit to achieving your long term business goals.
5. Other companies are prepared to recognise your people
Almost 50% of employees would leave their current job if they had the opportunity to be better recognised for their contributions elsewhere. A dedicated recognition program can lower voluntary turnover, drive productivity and lead to repeat positive behaviours. Recognition doesn’t need to be expensive, just make sure it is frequent, specific and most importantly, personal. “Thanks” goes a long way in showing someone they are valued.
While you can’t save everyone, there is a lot you can do to slow down unnecessary attrition in your organisation. Keep your people motivated, engage them in all aspects of your business and make sure they know that you notice, and appreciate, their achievements. Make it your personal goal to understand what motivates your people and what keeps them coming back day after day, especially once the honeymoon period is over.
To find out more about how the RedBalloon for Business team can help you reward and recognise your people, contact us today.