Paying Attention To Your Retention?
Lets face it; recruiting is costly for any company and frequently clients seem to think by either introducing a talent acquisition team, negotiating the lowest rates possible with recruitment agencies or by introducing a PSL (preferred supplier list) it will help to reduce costs.
Granted having an internal talent team or negotiating ridiculously low rates with a recruitment agency might help, but the biggest saver of your time and money comes with making sure your staff don’t want to leave your business in the first place! Retention should be your first consideration….ALWAYS! (So why is it so frequently over-looked?)
It’s amazing how many clients I have talked to about their staff attrition rates, often asking for the stats, how many people left your business last year? Which roles saw the most frequent churn? What is your process when an employee hands in their notice? How much did you spend on hiring through recruitment agencies last year?
(Enter looks of bewilderment here and a slight look of panic)
It’s ludicrous, you want to reduce your recruitment costs so the first thing you do is call your supplier (or get your talent/HR Manager to call them) and negotiate the recruitment agency fees down to 10%. Next that recruitment agency sheepishly agrees (Which they shouldn’t do in the first place if they are adding any value to you!) which then results in them not prioritising your roles or providing you with the best candidates because a competitor of yours (Who is in the same area) is paying that recruitment agency 20%. Guess where all the decent candidates are going now??
It’s totally counter-productive you are basically reducing your costs and reducing your talent pool at the same time! Please, please, please start thinking differently!!!
Stop wasting time negotiating and stare looking at the bigger picture. Why are you having such high volumes of employees leaving your business in the first place?
So why is looking at staff retention so important? Here are just a few reasons:
1) Failing to retain your employees is costly
An increase in people leaving your business is extremely costly to your bottom line. Figures have shown that if an employee leaves your business it could cost you equivalent to 50% of their salary and up-to 150% for those who leave senior level positions. Far more costly than any agency fee… so stop negotiating low rates and start looking at retention.
2) It creates organisational issues
An increase in people leaving your business will really impact on your organisational structure and processes. You will need to manage work-loads and possibly introduce temporary processes to ensure that things continue to run smoothly. You might even feel that due to organisational issues temp or freelance staff are needed which can adds to the cost even more.
3) It causes co-workers to feel insecure and to lose motivation
An increase in people leaving your business or high levels of attrition will lead to co-workers feeling very insecure, not only this but inevitably they will be expected to pick up the slack! This increase in workload will make them feel over-worked or result in them feeling more stressed or losing motivation. The result of which might be long-term sickness or stress… adding to your cost (again) The other thing to consider is that whilst the manager is focusing largely on recruiting or picking up the slack the colleagues might be feeling under-valued, appraisals or performance reviews may have been put to one side and they may feel like their career progression is now largely on hold.
4) It damages your chances to deliver successfully.
Lack of employees will often lead to an inability to deliver to your clients! If you haven’t got enough people in your organisation or you have lost people with very specific skill-sets the chances are your clients are going to be negatively impacted. Not meeting your service level agreements are going to cost you as a business, you may not be able to go to tender on project work because of non-delivery. Hugely costly to your business!
5) It will tarnish your reputation
This is key. High turnover and an inability to retain talent will damage your reputation. Both as an employer and as a business who ultimately stops delivering to clients. There are a number of review sites online that potential new employees can take a look at prior to making a decision on applying for a role in your company. SO if you have a bad reputation when it comes to retaining your staff this absolutely needs to be you first area for review.
If you have a number of senior employees who are consistently recruiting for their teams than it’s time to change focus!
Don’t know where to begin when it comes to reviewing your company’s employee turnover please get in touch with us, we are here to help.