In June 2014 a Forbes article circulated on LinkedIn entitled, “Employees Who Stay In Companies Longer Than Two Years Get Paid 50% Less”. Within the article were some startling statistics:
- The average raise an employee can expect in 2014 is 3%, but given the cost of inflation, it actually amounts to more like 1% in additional spending power.
- If an employee leaves a company, however, they can look forward to a 10%-20% increase in salary. In extreme cases, they may even see as much as a 50% increase. As well as the overall costs of replacing an employee when truly analyzed can cost your company thousands of dollars. In fact, statistics state that it costs:
What these statistics show us is that it is more advantageous for employees to leave their current situation and change jobs than be loyal. As managers, it can feel like your staff are jumping ship left and right for greener fields elsewhere. How does one create an environment of retention against the trends?
- For entry-level employees, it costs between 30% and 50% of their annual salary to replace them.
- For mid-level employees, it costs upwards of 150% of their annual salary to replace them.
- For high-level or highly specialized employees, you’re looking at 400% of their annual salary. (Ross Blake of Retention Associates)
Have a Retention Plan:
Most managers do not actually sit down and develop a plan about how you cultivate an environment that keeps your employees there. Here are key prescriptions that are needed:
Step 1: Frequent Recognition
- Recognition from Managers to Direct Reports
- Recognition from Colleagues
- Know results, qualities & behaviors you want to reinforce
- Be Creative
Out of ALL the activities you engage in as a LEADER, “Catching people doing things right” –and recognizing them for it –needs to be one of your TOP PRIORITIES!