Despite the increasing emphasis of organisations in implementing measures to retain top talent, very few companies actually consider the financial implications of losing employees.
Rather, they opt to see increased employee turnover as an opportunity to cut the ‘excess baggage’ of unhappy and underperforming staff.
A recent survey by Deloitte, the 2016 Deloitte Millennial Survey, found that around two-thirds of millennial employees have expressed a desire to leave their organisations by 2020.
In South Africa alone, 76% of millennials plan to leave their current employers before 2020. This means that our next generational leaders already have one foot out of the door.
The real cost of high staff turnover
The reality is that poor staff retention negatively impacts not only employee morale, but also productivity and therefore ultimately your organisation’s bottom-line. In addition, getting a new employee which includes costs of advertising the position, interviewing the candidate, screening and hiring, training, costs associated with the loss of institutional knowledge, speed of competence of new hires, and the impact on customer service can prove to be very costly for the organisation.
Furthermore, compensating on the productivity backlog caused by high staff turnover cannot be done overnight, and realistically speaking, optimising lost productivity can take up to two years in some cases.
Organisations also need to be aware of and understand the impact of poor staff retention on other employees – whose engagement will understandably be experiencing a downward trajectory as they witness fellow co-workers opting out on a regular basis. And while high employee turnover comes with a hefty price tag, it is still not always easy for companies to accurately track the real costs involved when it comes to employees regularly coming and going.
Employee retention requires ongoing interventions
And while employee retention is undoubtedly one of the biggest challenges facing organisations today, without implementing appropriate measures to retain staff, organisations will soon find themselves on the losing side in the war to secure top talent.
Here are some ways to minimise the potential impact of poor staff retention:
- Ensure the right employee from inception by being stringent during your interviewing and vetting processes.
- Be fair and consistent when it comes to compensation benefits available to your employees.
- Publicly acknowledging that your employees are valued and appreciated.
- Promote a positive working environment, employee optimism nearly always translates into job satisfaction, which in turn means less sick leave, absenteeism and improved overall productivity.
- Keep the lines of communication open, to ensure you foster good relationships with employees. Employees, especially millennials, enjoy receiving ongoing constructive feedback.
When it comes to millennials and Generation Z, always bear in mind that they are driven by challenging, and meaningful work that has a tangible impact in the world and workplace. They are innovative and ambitious, and like to be stretched all while working independently on engaging assignments that allow them to optimise and innovate in the business. Taking time to understand and speak their language will most certainly assist in building a productive and loyal workforce.
Ultimately, you cannot stop each and every resignation however, through implementing proper hiring processes and strategic employee management practices backed by appropriate reward and incentive programmes, you can ensure that your organisation experiences more highs than lows when it comes to productivity and retention.
About the author: Kay Vittee is the CEO of Quest Staffing Solutions (Pty) Ltd one of South Africa’s leading staffing solutions provider. She’s a business woman holding a Masters in Business Administration, a B.Com (Banking and Economics) and various other financial and marketing qualifications. Kay’s business acumen and success have made her a sought after speaker and thought leader.