Ask company leaders anywhere what the main reason for their success is and pretty well all of them will shout: “Our PEOPLE!” Yes, that’s right. People are your company’s most valuable asset and studies prove that employee retention is critical to the long term health and success of your organization.
Failure to Thrive
On the flipside, no amount of money poured into extensive marcom plans will generate the kind of ROI your company needs without talented and motivated staff support. Your employees impact every aspect of your business and without good people in place for long term marketing strategies, your business may suffer from a failure to thrive.
Real Costs of Losing Employees
High employee turnover has a negative impact on a company, both directly and indirectly. As well as being disruptive to your entire organization, there are many fallout effects and costs:
- mounting salary losses
- resulting increase in operating costs
- loss of business to competitors
- reduced customer service standards
- reduced morale
- enormous pressure on other employees
- loss of productivity and overall growth
Real $ Benefits of Keeping Good Employees
A recent example of successful employee retention yielding real dollar value, is of a large US hotel chain which calculated that a 10% decrease in annual employee turnover led to a 1-3% decrease in lost customers. That translated to a $50-$100 million increase in annual revenues!
Although your SME might not have numbers that grand, the concept is the same.
Metrics and Analytics
CMOs and marketing managers regularly employ metrics and analytical tools to measure the performance and success of all their various marketing strategies.
However, most companies don't have similar systems in place to track the many employee exit and recruiting costs. This is one of the main reasons the real cost of employee turnover can be an unknown.
Digital/Online Tracking Tools
Tracking tools will give you similarly valuable information for your employee retention strategies. With them you can track employee retention and turnover rates over the long term. This helps you spot any trends that appear and address any issues before they become major problems.
A popular employee retention software by Halogen (www.halogensoftware.com helps you segment your data by location, department, manager, and by employee performance levels.
Conducting employee retention surveys enables you to quickly gain valuable information from the most important people in your organization. Check out Qualtrics for do-it-yourself online survey tools (www.qualtrics.com).
Integration is Key
These tools can help integrate your various departments’ information and input, and encourage holistic growth as your departments will be working together.
It takes collaboration among your departments (HR, Finance, Operations etc.) and using the right tools will help you measure these costs and reporting mechanisms.
Happy Employees Boost Productivity
For SMEs to thrive in today’s economy, retaining the best employees is of vital importance, especially since you are often competing with larger businesses, and larger budgets, for top talent.
Check out these awesome stats that show the real $$ value of employee satisfaction:
- a 10% rise in employee satisfaction leads to a 5% rise in productivity (hrmorning.com)
- Companies that invest in improving employee engagement are more likely to have above-average profits (hrmorning.com)
- 10 % investment in employee engagement boosts annual profits by $2,500 per employee
- organizations that have over 50% employee engagement retain over 80% of their customers (Demand Metric)
Increased happiness and job satisfaction also improve the actual quality of work accomplished. They help unleash creativity and innovation which leads to greater long-term productivity. This translates to improved customer service, an increase in customer satisfaction, and overall growth of your business.