How Important is Salary for Employee Retention?
The cost of replacing current employees is astronomical when you factor in the time it takes to hire and train them. As well as, the time associated with hiring and training new employees. Considering these costs, it is difficult to fathom why not all employers are laser focused on employee retention.
If you have an employee that’s about to walk out the door, should you offer them more money to avoid those costs? It is important to understand just how important salary is to maintain your workforce.
The Gap in Understanding Employee Retention
Polling shows that around 75% of employees that left a position did so for reasons other than pay. However, 90% of managers believe that money is the driving factor behind employee loss. In reality, if employees don’t feel good about the environment that they are in, or the work that they are doing, no amount of pay can keep them in your office. Studies suggest that appreciation for their work was the single most important factor, followed by their relationships with coworkers.
While pay is often a tangible method of showing employees that you appreciate them, many don’t feel that it is important as regular feedback and praise when they have done something positive. Rather than simply look to increase employee pay, many companies choose to offer other incentives for great employees.
Additionally, making sure to help employees maintain positive work environments with their coworkers can pay great dividends. These can be simple group presentations or activities, breaks or quarterly lunches together. Simply making sure that you understand your employees’ needs, and then taking concrete steps to improve the work environment for them can lead to higher overall retention.
Present the Ladder
Over time, many employees will want to grow their own skills and take on increasingly difficult tasks for the company. Introducing a plan for employees to climb the ladder within the company can lead to motivated staff that works hard to understand all aspects of your business. You can also be sure that when your internal employees receive promotions, that they will be ready to hit the ground running.
If you want to increase your employee retention, it is important to look beyond the paycheck and find out what really matters to your staff.
For more employee retention tips, check out Keep Your Employees from Fleeing to Competitors