Retaining employees is a measurement of keeping the employees that you want to keep. If you have 10 employees and you lose one employee each year, you will have a 90 percent employee retention rate.
You may be wondering, as an employer, why should you care about your employee retention rate? Hiring and training employees is expensive. Very Expensive. For one, training an employee costs, on average, 50 percent of the annual salary for that position. Many small business owners miss the fine print surrounding the cost of a new hire. First, you have to pay to run ads that will attract people to apply and interview for the position, which can lead to the time-consuming process of sorting through resumes and conducting the actual interview. Then comes the second and sometimes third round of interviews to narrow down the number of candidates that are appropriate for the job. Many times, multiple decision makers in the company are involved in the interview process. Once you finally decide on the person you want to hire, top talent is taken out of production to spend time working with and training the new hire. Eventually, the new hire is released to work on their own, but like any newbie, they make numerous mistakes as they learn, and they are less productive than their veteran counterparts. Mistakes equal time consumed by others correcting the errors and aggravated customers. Aggravated customers can become fires that need to be put out, which can consume even more of your time as you attempt to win back the customer’s trust.
Every good company is built on good employees, and keeping the best employees around for as long as possible is a time-tested recipe for long-term growth and success.
From a financial standpoint, offering an employee benefits program that will improve your employee retention by 20 percent can save you money in the long run. Playing on the example above, if your average employee makes $70K annually, and you currently have a 90 percent employee retention rate, then improving that employee retention rate by 20 percent means that once every five years you would not lose the one employee provided in the example above. Because training a new hire consumed 50 percent of their salary, this would save the company $35,000 every five years, or $7,000 per year. The savings that you would receive equates to $58.33 per month, per employee during the five year period. If you can spend less than that on an employee benefits program, you end up ahead!
Voluntary benefits can be offered to employees with a company-defined cost to the business. With that in mind, you can give everyone a $30 per month allowance to purchase voluntary benefits, and your goal is accomplished!
Interested in providing your current and future employees with the benefits package that they deserve? At Retention Solutions Pro, we can help you find the perfect package that will fit the needs of both your company and your employees, resulting in a better work environment and employee retention rates that will make you proud. What are you waiting for? Contact Retention Solutions Pro today and start on the path to a better business.