The cost of staff turnover
In the last year and a half, millions of employees from multiple sectors around the world have joined a mass exodus from the workplace. Many have tried explaining the mass exodus, but reports indicate it may be due to inadequate salaries, limited career advancement, poor work-life balances, general unhappiness with management or the company and numerous other reasons.
This so-called Great Resignation, spurred by the COVID-19 pandemic, has turned employment into a worker’s market. TikTok users have coined phrases such as “quiet quitting” and “act your wage” as employees find community with others who don’t feel properly valued or appreciated by their workplaces.
As employees decide what’s right for them, employers are having to reconsider what actually makes their company worth working for. If you feel like your business may be at risk of losing top talent, or you have already begun losing your best workers to the Great Resignation, it is probably time to consider some employee retention strategies.
Over the next few weeks we will highlight 15 effective strategies to boost employee job satisfaction and help you hold on to your best workers.
Here is number 1.
- Offer Competitive Base Salaries or Hourly Wages
Offering a wage worthy of sacrifice and hard work should be the number one priority when making your employees feel their work is valued. Proper compensation is far and away more important than any other item on this list; you will not retain employees effectively unless you pay them what their time is worth.
Not only should employees be paid fairly for their time and work, they should also be able to afford the cost of living where they live, their wages should be regularly adjusted for rising inflation and they should be additionally compensated as their experience level with the work grows. Additionally, every time their responsibility increases, so too should workers’ reward increase.
The first step to offering your employees the right wage is to determine the living wage in your area.
The second step is to research what your competition is offering in terms of salaries and wages, and what kind of raises competitors have been handing out. If you are not offering the top wages compared to your competition, you will be more likely to lose your best employees. Lower performers will take their jobs, costing you significantly more money in the long haul than were you to just pay the best employees more.
Hiring and training a new employee is significantly more expensive than raising the wages of an existing employee. The Society for Human Resource Management estimates it can cost six to nine months of an employee’s salary to replace them after consideration of headhunting, hiring and training costs. For example, that’s $30,000 to $45,000 to replace an employee making $60,000 a year—not to mention the massive loss in productivity, revenue and workflow during the hiring and training process.
Retention is better than recruitment, so think carefully about the rates you pay your staff, as getting it wrong could be extremely costly.
Tony Delaney, CEO Brownie Points
