Employers save money by strengthening worker retention

With the high costs of employee turnover affecting all types of organizations, employers are searching for ways to effectively raise their employee retention and protect their greatest asset – skilled workers. Through the Kansas Career Pipeline, employers can implement powerful tools to help retain valuable employees, saving time and money.

Turnover costs can significantly affect the financial performance of a company. According to the U.S. Department of Labor, the U.S. turnover rate for all industries combined is over 40 percent. The manufacturing industry experiences the lowest rate at approximately 30 percent with service industries at the highest – over 70 percent.

Most companies don’t have a process to determine the cost of employee turnover, and are therefore unaware of how much the company is affected. Direct costs include recruitment, selection, and training. But employers should also consider larger workloads and overtime for co-workers, lost productivity due to low company morale, customer dissatisfaction and lost business, lost expertise, and temporary workers.

Some experts estimate that total recruitment costs can run as high as 30 to 50 percent of the annual salary of entry-level employees, 150 percent of middle-level employees, and up to 400 percent for specialized, high-level employees.

Fortunately, employers can avoid high turnover costs and increase retention by executing a few simple techniques:

• Have a process in place to tabulate costs. You won’t know how much you’re losing—or saving—if you don’t have a method to calculate costs.

• Be sure to consider all costs. Many employers underestimate what goes into replacing a worker. Examine your company’s processes and take all facets into consideration.

• Rank your employees. Retain your top performers, develop and retain your middle performers, and leave yourself open to replacing your lowest performers.

• Survey top employees. Find out what keeps them working for you, why they might leave, and what they need to be happier and more productive.

• Make sure you’re employee oriented. Solicit input and involvement, and maintain a true “open-door” policy. Offer rewards and opportunities for advancement and growth.

• Have a strategic compensation package. Your employees are working hard for you—be sure to let them know how much you appreciate it. This includes incentives, bonuses, and benefits that help them balance work and family.

Most importantly—and the best way to prevent high turnover—strengthen your retention by hiring the right workers for the right jobs in the first place. With the Kansas Career Pipeline, employers can pre-qualify candidates’ skills, interests, and work values before investing in the interview process. The Pipeline also helps nurture relationships for the future through e-mentoring, scholarships, apprenticeships, summer jobs, and on-the-job training opportunities—helping to ensure dedicated employees who not only like their jobs, but are highly qualified.

The Pipeline also lowers turnover costs by helping employers with recruitment efforts. Employers can create an awareness of high-demand occupations in their companies and industries, put specific career openings in front of highly qualified candidates all over the state, and give candidates a true idea of what those jobs are like with low-cost videos on the Pipeline website. Visit the Kansas Career Pipeline to request information on getting your company involved in the Pipeline, and start saving time and money today.