As I’m sure you know, it’s not an easy feat to succeed in modern business. The problem is compounded - particularly for small businesses - when it comes to finding and holding onto great employees. In light of this, today we’re going to have a quick look at some statistics around employee retention in the context of US organisations. While this data might be specific to the US, it no doubt shines a light on overall trends that impact all organisations big and small.
Three Million Americans Quit Their Job each month.
According to data from the US Bureau of Labor Statistics, three-and-a-half million Americans quit their job each month, and this number doesn’t even touch on involuntary termination and layoffs. I’m starting off with this statistic intentionally to put into clear terms the size and scope of the problem that enterprise faces as they try to retain great staff. In addition to this, it’s been said that 80% of staff members are either actively looking for a new job, or are open to having a new job if the opportunity presented itself.
A study 1,000 Workers Found that 31% Have Quit a Job in the First Six-Months.
Data published by HR firm, BambooHR shows that shortfalls in an organisation’s onboarding process will often lead employees to quit before the six-month mark. Their research shows a clear correlation between organisations that have a sub-par onboarding process and a lack of employee retention, which goes to show that if you’re not willing to make investments in your staff right from the start, they’re more likely to leave your organisation for one that they feel valued at. There can also be frustration for a new staff member if roles and responsibilities and expectations aren’t clearly defined, so this statistic goes to show that if your organisation takes the onboarding process more seriously and even implements a new onboarding process, you’re more likely to train and retain your new members of staff.
More than 50% of Organisations Globally Have a Problem Retaining Staff.
There was a study published by Willis Towers Watson, turnover and attrition rates have been increasing alongside increase hiring rates. The firm put the number at more than 50% of organisations that are currently facing a crisis when it comes to employee retention. I’d argue that this figure applies to all organisations currently operating, regardless of their size and operations. If your organisation can’t successfully hold onto its key players, it’s at a significant disadvantage when it comes to competing in a dynamic landscape and delivering on its most important promises to clients. It’s also disastrous when it comes to successfully creating a vibrant, productive and safe working environment that encourages staff members to produce their best efforts.
87% of HR Leaders Say Improving Retention is of ‘Critical’ or High Priority Over the Next Five Years.
In a number of ways, it must be frustrating to occupy the position of a HR manager in an orgasation, due to the way in which the problem has been so clearly defined in the mind of those managers, but CEOs and other executives can often be distracted by the day-to-day operations that they haven’t taken a step back and analysed it with a macro lens. Research published by Kronos and Future Workplace shows that 87% of these HR leaders are both aware of the challenge and the risks associated with a lack of employee retention, so much so that they’ve stated it’s one of their most existential concerns as an organisation continues to operate into the future. The problem for those HR managers, however, is that limitations of an organisation’s time and resources can often hinder progress in this context.
Costs of replacing a highly-trained employee can be more than 200% of their salary.
We’re going to end on this point because it’s a perfect summation of the problem in action, and how your organisation can further benefit from retaining some of its best members of staff. This phenomenon was expanded upon by HR Cloud who published a blog post titled “the real cost of employee turnover.” The research cited in the post states that for low-paying jobs (under USD $30,000 a year) the costs for an organisation associated with finding a replacement stand at around 16% of their salary. This figure increases to 20% of an employee’s salary for a $30-50,000 role, and an astounding 213% for highly-educated, specialist roles. To put this into a clear picture, the cost to replace a CEO being paid USD $100,000 is, according to their research, $213,000.
In the near future, we’ll unpack these statistics even further and also go into some more detail on the reasons why employees are quick to leave some organisations while staying loyal to others, and how organisations can better improve their employee retention skills as you move into the future.
For now, thanks for your time, and I’ll see you in the next piece.