Stats that Shock

1. “Replacing staff costs businesses £4 Billion each year.” The Telegraph, 2014.
2. “The cost of losing an executive is astronomical – up to 213% of the employee’s salary” – Center of American Progress (CAP)
3. Average employee turnover rates over the next 5 years are predicted to rise from 20.6% to 23.4%. – HayGroup

Retention remains one of the key workforce issues for business leaders to keep a hawk-eye on, largely because of its huge impact on turnover and profitability. A high level of churn negatively affects employee morale, productivity and customer satisfaction…while reducing turnover can dramatically shrink accrued separation, hiring, training and overtime costs for your organisation.

Consistently tracking retention metrics over time is crucial for spotting trends and addressing them before they develop into business-threats. General metrics such as basic retention and turnover numbers are inadequate in today’s competitive economy and talent-centric business world. Needless to say, the parsing of a large list of specific metrics is both counter-productive and difficult to maintain. So which are the most important metrics that business leaders need to track?

1. New Employee Attrition Rate

Employee attrition happens when new employees leave the organisation for another when they get a ‘better’ offer. A high attrition rate is an indication of possible management issues within the department, job or salary dissatisfaction, etc. It could useful for HR teams to conduct exit interviews to understand why new people are so quickly vacating their positions and rectify the problems before they escalate. If a high attrition rate goes unattended for a period of time, your organisation could be incurring extra costs overtime when it comes to hiring and training.

How to measure?

Number of new employees who left the company voluntarily divided by the number of employees employed by the company during a given time period.

2. Promotion Rate / Promotion Wait Time

A delayed promotion could result in a high level of dissatisfaction and may force an employee to leave the organisation in search of better opportunities. Promotions are highly desired because of it’s positive impact on pay, authority and the ability of the employee to influence the business. Timely promotion helps improve employee retention so make sure that you keep promotion wait times at an acceptable level. One good way is to set time parameters for evaluations and use reviews as a basis for career advancement.

How to measure?

The ratio of employees who were promoted, and the average time (in years) between promotions.

To learn the other retention metrics you need to improve the bottom-line, download the full whitepaper here.

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Article contributed by HRBoss / Image credit: hrinasia.com

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