5 Reasons Why Employee Retention Matters
Last Updated: By TRUiC Team
As a startup, you are likely working with a limited budget and trying to do more with less. The last thing you want on your mind is worrying about whether your employees will stick around to get the job done.
In this guide, we will discuss five reasons why employee retention matters and what you can do to keep your employees from leaving so you can run a more efficient company.
Why Employee Retention Matters
Retaining employees as a startup is crucial to surviving the first few years of business. There are already so many responsibilities and areas of focus that take up your time, so hiring and getting new employees comfortable could drain the rest of your resources.
Here's why employee retention matters and some advice on what you can do to keep employees in your company.
1. Retention Impacts Your Company Culture
A company's culture is what attracts and retains employees. It encompasses the values, beliefs, and behaviors that make up your company. Have you ever worked at a company where there just didn't seem to be any atmosphere or connection? You may have felt distanced from your other employees or felt the detachment from higher positions.
When a company runs through employees quickly, it can be difficult to create any kind of work culture. Turnover creates an unstable work environment and causes a lot of stress for everyone.
Make sure you spend time developing your company culture and be intentional about the kind of atmosphere you want to create. The more you can fine-tune your culture, the easier it will be to keep employees who resonate with its message.
2. Retention Benefits Your Company
As a startup, you have too many fires to put out already without having to deal with a high turnover rate. It can be expensive and time-consuming to constantly be hiring and training new employees.
It's important to keep in mind that your employees are an investment. The more you can invest in them, the more they will grow with your company. A Jobvite survey done on employees who left their job within 90 days revealed that 32% of them stated it was because of company culture.
Your customers will also be impacted by high turnover rates. If they constantly have to deal with new employees, they may become frustrated and take their business elsewhere.
If you want your startup to thrive, you need to invest in employee retention so that all the other gears running the business start turning more smoothly.
3. Training New Employees Is Expensive (and Difficult)
In 2015, the Association for Talent Development did a study and found that organizations, on average, spend about $1,252 per employee on training and developing their growth.
That means if you have two employees leave in the same year, you just wasted almost $3,000 on their development that they'll take to another job. That's why retaining employees is important so you can get a return on that initial investment.
Not only is training employees expensive, but it's also difficult. When you're constantly having to train new employees, you never really have a chance to perfect your process. You're always starting from scratch which can be frustrating and inefficient.
Try to have a clear hiring system before you actually get an employee in the door. This should help you at least make improvements if you lose an employee or understand where things could have gone wrong.
4. Retaining Employees Increases Productivity
It's probably no surprise that the longer an employee is at a company, the more experience they gain. The employees that have been with you longer probably know the ins and outs of the entire business at this point.
Startups are notorious for moving people around to different job responsibilities, and if someone is out sick, another employee can probably pick up some of their work.
It helps increase productivity because employees feel more comfortable in their role and they know what's expected of them. They don't have to spend time trying to learn a new process or task because they've already mastered it.
Productivity can help employees feel engaged with the business and help them take ownership over their roles.
5. Retention Leads to Experience and Mentorship
Getting hired at a new startup can feel like walking into a room where everyone is running sprints while you're still learning how to walk.
In order to make new employees feel like they are immediately part of the team, you'll need some help from other people in your organization. That's where retaining employees really comes into play because they can help with the onboarding process.
Experienced employees can mentor new employees and help them learn the ropes while still doing their job effectively. This is beneficial for both parties because the new employee has someone to go to with questions and the veteran employee feels valued.
