Employee retention refers to a company’s ability to retain and stop employees from leaving the organization. Employee retention results in increased productivity and is also very resourceful. Although recruiting new talents in the company may bring a new perspective, it is equally important to retain your key employees.
Undoubtedly, hiring is a time-consuming and exhausting process. And after the employee is hired, it may take a lot of time and effort to embed the required skills in the employee’s mind to facilitate the growth of the company. Hence, companies consider retaining current employees as their best option. Since the existing employees know the process, they can work effectively and produce much better results.
Importance of employee retention
Here is some notable significance of employee retention:-
- Saves effort and cost
Recruiting is a backbreaking process. Finding the top talent that will fulfil the job profile requirement is difficult. After recruiting, training is important. So, retaining your existing employees who know how the organization works is easy. Another challenge is that if a new candidate leaves the organization early, all the cost and time invested in them goes in vain.
- Increase in Productivity
Employee retention is directly linked to the organization’s productivity. This means that a new employee may take some time to speed up the whole work process while the old employee can do the same task more effectively and in less time. Companies with higher retention rates are likely to increase their productivity compared to those with a high employee turnover ratio.
- Satisfaction of the employees
Employees stay in an organization only when they are satisfied with the compensation and salary, growth opportunities, company culture, and work environment. If these aspects are missing, employees start looking for a job change. If a company can retain its employees, it may depict the interactive work culture of the company. Satisfied employees may encourage other team members to work enthusiastically, resulting in profitability.
- Stronger workforce
Employee retention enables the leader to invest more time with the team and improve the performance of existing employees and make them better. Current employees are able to handle different situations smoothly and take on extra responsibilities. They are even capable of mentoring new employees whenever it is needed.