With the New Year just around the corner, businesses are reevaluating their priorities to meet their 2023 goals. However, achieving any business goal can be impossible with a team that is short-staffed or doesn’t have the right skills or qualifications.
While the obvious solution to the situation seems to recruit new talent, it is, in fact, employee retention that is the key to achieving all business goals. Here’s why:
Training an all New Team is Challenging
Prioritizing employee retention over recruitment saves businesses from employee training. Think about it; your existing employees know company policies, values, goals, and vision. They don’t just know it; they have been contributing to the company’s growth for however long they have been a part of the team.
Letting these employees go for new talent will deprive your company of the experience and expertise gained from working in the company. It will also put you in the difficult position of training an all-new team, which can lead to mistakes and mishaps. On the other hand, the existing employees can mentor any new ones on the job more effectively.
High Recruitment Costs
With the average cost of recruitment at $4000, focusing on employee retention is a more financially-sound decision. Businesses in the US and worldwide have lost more money on recruitment after the Great Resignation than during it. The retirement of boomers and Gen Z’s reluctance toward settling for a job have also multiplied the above figure many times for various businesses.
Alternatively, retention of existing employees with increments is cost-effective since it eliminates the cost of recruitment and even brings it down with the help of referrals. With increments or inflation adjustments to employees’ salaries, businesses can save money and motivate employees for improved work output and contributions to the company’s growth.
Maintains Company Culture
Besides businesses’ growth, the Great Resignation has negatively impacted their company culture. With old employees who had contributed to the building and maintenance of a positive workplace culture gone, motivating new hires can be especially challenging.
Moreover, the absence of old employees who helped build the company and its culture can instill mistrust toward the company and the employers among the new employees. New employees might begin hunting for new opportunities or not want to contribute their best efforts at work if they stay. In any case, they will always prioritize their financial safety over their professional growth in an organization that doesn’t seem to value them.
Finally, prioritizing employee retention and achieving it helps cultivate a strong company image. When the average stay of employees is long in any company, it sets an image as worthy of contribution and growth.
With the Great Resignation not ending even after 19 months, prioritizing recruitment over retention can also make things challenging in the long run. It is already apparent that Gen Zers and Millennials are not ready to take a job that doesn’t provide them with everything they need. Thus, businesses must hold on to their existing employees if they wish to continue to exist too.
