Employee Retention

What is employee retention and why does it matter?

Kristina Finn | December 9, 2021

compass pointing to the word retention

The past year we’ve heard non-stop buzz about labor shortages and the struggle for companies to find hourly workers to hire. But what’s also contributing to the labor shortage is the record rate of employees leaving jobs. This has become a serious problem across all industries, especially the supply chain.

Despite the negative impact turnover has on operational costs, productivity, and company culture, organizations are still not prioritizing efforts to reduce attrition. This is the leading workforce management challenge for operation and human resource professionals. Determining where to start to improve retention proves to be the first and most difficult hurdle to overcome.

What is employee retention?

Employee retention is the strategy companies implement to keep employees in their workforce. Sounds straightforward, right? Well it can be a little more complicated than it sounds.

In order for a company to develop a strategy around this, they first need to understand what is causing their employees to leave. There is a long list of reasons someone voluntarily leaves a job – career growth, pay, safety concerns, scheduling, etc. Figuring out what is causing this dissatisfaction before an employee leaves is crucial to retaining that person. For a business that employs thousands of frontline workers, gathering that data can be tricky.

Without that information though, companies are blindly taking action to try and improve employee satisfaction, and therefore not seeing the ROI for their efforts.

Since employee retention is a crucial factor in building a successful organization, WorkStep offers powerful employee retention software that can help businesses keep their frontline workers engaged and reduce turnover.

Why does employee retention matter?

When a company hires someone they are making an investment. Significant money is spent on recruiting, onboarding, and training a new employee. So the cost of turnover is extremely high.

To replace an employee, a company will pay half to two-times the amount of their annual salary.

This has a serious impact on the growth and profit of a business. Therefore, it’s extremely advantageous to an organization’s bottom line to improve retention rates.

High turnover is also detrimental to company culture. As more and more dissatisfied workers continue to leave, it sends the message to remaining employees that the company does not value them, which leads to a drop in overall morale and motivation. And the turnover cycle continues.

When a tenured employee decides to resign, not only are companies losing money, but years of knowledge and experience is walking out the door too. Hiring someone with the same skill level is unlikely, so a new employee may take longer to complete tasks. This, combined with lowered morale and motivation, lead to a decrease in productivity.

What’s most surprising is that 75% of turnover could be prevented by management.

How to overcome the first hurdle

Getting started is often the biggest challenge when faced with a huge undertaking like employee retention. Yet every day that passes is more company money down the drain and more workers needing to be replaced. So how can companies grab the reins on this spiraling problem?

Find a solution that allows management to gather anonymous employee feedback in real-time and at key milestones during their career journey. Being able to act on this feedback immediately as it comes in allows company leaders to make changes that could impact an employee’s decision to stay and the sentiment of the organization as a whole.

By providing a platform where individuals can voice their opinions or grievances helps employees feel heard. Taking action on that feedback makes them feel valued.

Tune into your frontline with WorkStep

With the frontline employee engagement platform that delivers the real-time insights you need to take action, retain your workforce, and drive your business forward.

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Kristina Finn

Kristina Finn, Content Marketing Manager | kristina@workstep.com