The struggle in the current job market is clearly not because of lack of jobs but these are attributed to lack of job applicants and applicants not possessing the expected experience and training.
What matters more: retention or hiring? There’s no simple answer to it. With the economy still shaping, employers need to equip themselves with the technology to handle recruitment and retention and decide which part matters more to them.
According to the healthcare professionals, when asked to weigh the significance of recruitment and retention, it was found that nine out of 10 HR leaders believed that retention is more essential to their company’s success.
Is retention more critical for employers?
Let us review some facts:
Recruitment and hiring challenges:
In a job-seeking marketplace, hiring the best talent is as challenging as ever. In the year 2019 the unemployment in Australia was 6.46%, it fell to 5.11% in 2021. The challenge for Australian businesses has been with issues such as, lack of job applicants and applicants not possessing the requirement experience and qualifications.
Under such conditions, it is getting increasingly tougher for employers to attract quality talent and hire the best match, making it essential for businesses to try to retain experienced and skilled professionals even if it mean a higher payroll. In a market where the end-users expect more value for money, retaining at a higher cost to the company can mean slimmer margins.
Replacing an employee is costly:
Replacing a competent worker is costly. Estimates of the cost of turnover differ from one sector to another. Forbes assesses that the cost of replacing an entry-level worker is 50% of their wages, the replacement cost for mid-level employees is higher (125% of their yearly salary) and for senior executive positions (200% of their yearly remuneration).
Turnover expenditure further adds to the fallen productivity and impacts the company’s culture. While recruitment is a significant part of the equation, what leads to employee turnover is recruiting the wrong person in the first place. Focusing on sustainable retention practices is the best shot for a business to avoid such significant expenses.
Specialists know they may have to change jobs to maximize their earnings:
For professionals looking ahead to maximize income, it is a common practice to switch jobs rather than waiting for a performance-based raise annually from their employers. This is one idea that most employers find difficult to resist and work on retention even if it means higher cost to company.
Poor customer experience:
When developing customer relationships, there’s no certain way to put a price tag and measure it. Sadly, when a company experiences high employee turnover, what’s lost is years of expertise and institutional knowledge.
Without the slow and steady guidance for right experience, your recruits will not be able to provide the desired experience to your customers. Customers look for a service provider who knows how to get the job done and helps them through all problems if any at all. And without desired skills and experience, there’s little possibility of meeting customers’ requests.
Effect on work culture:
Lastly, consistent turnover affects workplace morale disastrously. Of course, occasionally, employees can leave when they get a better job offer, but when your team sees everyone consistently talking about leaving and making attempts for it, they’re likely to follow the same pattern.
Employees who feel engaged with their team and the company are likely to stick around. Good communication and teamwork eventually make employees more confident, enhancing their capacity to work and stay.
Retention vs. Recruitment
A disengaged employee can cost your company 34% of annual remuneration through lack of productivity and absenteeism. And once they decide to leave, you may spend critical resources including valuable time and incur additional cost for recruitment, training, to re-fill their role.
So, if you’re speaking of a safe bet- it is better for leaders to develop and nurture the existing talent, helping them look for better opportunities and roles than recruiting new team members in their place.
Strategies to improve employee retention
1. Develop goals to motivate employees
Every employee, from beginners to top level, need a clear set of goals. A common mistake is setting goals at the beginning of the season and forgetting them until the review period.
While yearly or season goals are too distant and tend to lack in motivation, setting short-term goals to encourage and incentivize teams can be the way to keep staff motivated and engaged.
2. Support technology
Leaders should be aware of the recent technological advancements and how they can help their team perform better. For instance, there was a preconceived notion that AI and automation had impacted workplaces and rose job security concerns. But, eventually more and more businesses are realizing that these are aimed at being productivity and efficiency enhancing mechanism for human workforce than a substitute. Normalizing the usage of such advanced infrastructure has enabled businesses deliver more value to their clients and reassures the team on growing with the enhanced ecosystem.
Millennial workers love using advanced tools and expect them to be a part of their workplace. These can help them feel more engaged and satisfied.
3. Interact as much as possible
Good communication is the foundation of any successful working relationship in Business. According to a Gallup study, employees whose managers conduct regular meetings are thrice more engaged.
Leaders should enable their workforce with an open platform for feedback, concerns, ideas, and opinions.
4. Promote development and growth
Lastly, one thing every employee wants is to grow their skillset and in-demand training that can help further their career. Better career opportunity and the resulting social status is a significant cause of job changes.
Employees who feel stuck in a rut are likely to be unhappy and frustrated possibly even resign soon. Enhancing every employee’s skill is in the best interest for businesses. The additional cost may not be deterrent for large brands, however it can prove challenging to a smaller business.
Conclusion
Regardless of how great your company is, it is nothing without happy employees. Boosting the productivity of your team and Engage employees, set communication flows, and use the latest technology to establish retention. You can set-up a platform for growth, by enabling your team to delegate and get additional support to boost productivity with tech enabled processes and outsourcing.
Boobalan Madhavan | AccSource | www.accsource.net
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