Creating an Employee Retention Strategy
Author: XpertHR Editorial Team
Employees who are searching for more meaningful work and seeking development opportunities that may not be available at their current employer fuel increases in turnover. The turnover of top talent, whose skills and competencies are those an employer would very much want to retain, is classified as dysfunctional turnover. This type of turnover can lead to the most business risk, especially if employees in key roles engage in a mass exodus from an organization. Costs of turnover include:
- Replacement costs. Replacing an employee may cost 50 to 75 percent or more of the employee's annual compensation;
- Loss of institutional knowledge;
- Dips in productivity; and
- Erosion of employee morale for those employees who remain at the organization and may feel stagnant.
In an effort to reduce turnover, organizations can create retention strategies that support their business goals and are consistent with their mission. A retention strategy is a planned approach to retain talent (particularly top talent), prevent attrition, and reduce dysfunctional or avoidable turnover. By creating targeted employee retention strategies, HR leaders can drive employee engagement and productivity, thereby propelling overall business growth.
This guide identifies the steps to consider when creating an employee retention strategy.