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Better retention rates are better for business. Employee turnover costs can pose a significant burden on the company budget, and any money spent trying to replace employees who moved on is money you cannot spend on your exisiting employees – who as a result might be more inclined to move elsewhere too.
This vicious cycle is one of those situations where you may in fact have to spend money to save money. To prevent employee turnover from eating away at your budget, you’ll have to find some funds to invest in your retention strategy.
To help you spend the money wisely, the Glassdoor Economic Research team analysed over 5,000 job transitions listed on resumes shared on the website. The result is a list of four common reasons for employees to quit, and what you can do to retain them.
Offer room to grow
For employees looking to get ahead, changing companies is often the best way to do so. According to Glassdoor’s research, employees are about three times more likely to leave for a new employer than to stay and move into a new role at their existing company.
To prevent losing talent to the competition, make sure every employee understand the potential career path and opportunities for growth your company can offer them.
Training and development
According to the researchers, once employees start to feel like they’re stagnating, each additional 10 months they stay in the same role without change is associated with 1% higher chance they will leave the company for their next job.
Since the average time spent in one job role among the analysed resumes was only 15 months, the first year of employment is crucial. Empower staff with training and development options right from the start, sending a clear message you’re here to help them progress.
The power of pay
“Don’t underestimate the power of frequent pay raises in your retention strategy,” the Glassdoor blog states. The researchers found that on average, a 10% higher base pay is associated with a 1.5% higher chance that an employee will stay at the company for their next role.
Additionally, while 37% of examined job moves resulted in lower pay, the majority (63%) of job transitions were upward moves resulting in the same or higher pay.
Invest in company culture
On average, employees in the research sample who moved jobs enjoyed a better workplace culture at their new company, with higher Glassdoor rating for the new employer than for the old one. Additionally, the study found that employers with a better overall company rating, career opportunity rating, and culture and values rating are more likely to have employees stay with the company when progressing to their next role.
Commenting on the research findings, Dr. Andrew Chamberlain, chief economist of Glassdoor, said: “Employee turnover is costly for employers. Although you can’t control everything when it comes to turnover, Glassdoor data confirms there are many ways you can control whether employees stay or go.”
Summarising the results, he added: “Employers that work to improve company culture, offer competitive base pay and regularly promote and advance employees into new roles will retain them longer.”
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