Finding, and keeping good people in your business is one of the fundamental keys to success.
As WA mining exports are again increasing, demand and competition for the best people is set to also increase. This is when poaching becomes a common challenge for employers across the state, with many industries affected, not only mining and resources.
By focussing on improving employee retention, businesses benefit from more productivity, better team culture, and retaining the specific skill sets and experience needed to effectively perform the functions of the role.
Costs of poor retention
The impact of an employee leaving can be huge. Estimates suggest the cost of replacing an employee will be at least 30% of their salary and in many cases up to double the employee’s annual salary. This doesn’t even account for other indirect costs such as:
- loss of productivity when other employees need to fill in for the vacant position,
- administration time and costs involved in exit processes and onboarding a replacement,
- the impact on clients and suppliers of changing contacts,
- the reputation of the business if multiple people are leaving, and
- loss of productivity while new employees become familiar with the role.
Unfortunately, around one third of new hires quit their job after 6 months, meaning a repeat of the recruitment process and further costs! Those who do stay can take around 12 months to reach the same capacity as an existing staff member. The importance of retaining your best employees is clearly evident.
Ways to improve employee retention
It is inevitable that employees will leave your business from time to time, and for a variety of reasons, but the following tips can really stack the odds in your favour.
Be clear on your expectations
Make sure your employees are aware of the requirements of their role and what is expected of them. Providing clear position descriptions and having frequent informal reviews or simply checking in helps keep employees on track and working towards your business goals.
Develop your employees
When an internal vacancy opens up, where possible, recruit from within your existing team. Not only does this save time on recruiting and training new employees on your processes and systems, but it also provides a sense of security and trust to your employees.
Even when hiring from within, you’ll ultimately need to recruit for a replacement of that role, and having a structured onboarding process means you’re more likely to retain that new employee beyond the first year. While the first few days in a new role are critical for providing a foundation for future success, having regular check ins at 14, 30, 60 and 90 days is equally important for retention.
Employees not only value clear and effective communication but they rely on it to perform their role well. You’ll find most people thrive on feedback so find ways to express constructive feedback to your employees. Hold regular team meetings where you can communicate your business goals and progress to your team. This gives your employees a chance to ask questions and contribute your team.
Provide employee perks or benefits
This doesn’t have to be extensive or costly, with some simple perks shown to be more effective in retaining employees in the long term, over cool gimmicks like a rooftop pool or table tennis. Consider the workforce and what might be appropriate for the people on your team.
These are some perks that you may be able to offer employees:
- Regular social gatherings such as end of month drinks, or Friday lunches
- Celebrating birthdays with cake and shared morning tea, or
- A day off on their birthday
- Negotiating staff discounts with local businesses, such as gyms, cafes, mechanics, etc.,
- Discounted health insurance,
- Performance bonuses, or
- Flexibility to work from home.
Remember, focussing on retention strategies is an important investment, and your employees will repay that investment with loyalty, productivity and positive morale. If you have any questions or would like to find out how we can help with employee retention in your business, you can call our Perth office or chat to a real live member of our team through the chat link on the right.