INSIGHTS, RESOURCES & EVENTS
Does Your Labour Turnover Cost 200% Of Annual Salaries?
Retaining Employees With The 5R’s
It is without a shadow of a doubt that the importance of retaining staff has become a much more crucial issue for business leaders and HR professionals within the last 5 or 10 years. Not only is this as a result of the widely accepted fact that a high employee turnover leads to demanding expenses for any business, but also as a result of the changing viewpoints towards employees who are broadly recognised as a company’s greatest asset.
It is astonishing to read that labour turnover can cost up to 200% of an employee’s annual salary, depending on the role, which is an extremely high cost to any business. But rather than focusing on the problem, let’s take a look at the solutions.
What are the best steps for a leader or manager to take to ensure that they are doing everything that they can within their control to minimise labour turnover in view of retaining the greatest assets in their company?
Let’s start by reviewing the 5 R’s outlined by Harvard Business Review:
- Responsibility – give your employees responsibility which ensure they have the opportunity to develop new skills and grow and develop to their full potential within the business.
- Respect – show respect and appreciation to your employees to build trust between you and them, which will ultimately reduce stress and tension between team-members.
- Revenue-sharing – tie up your employees’ wages to the business performance to ensure that you gain long-term commitment as this serves as a great incentive for employees to stay with the company as it grows.
- Reward – this can go beyond monetary rewards and may include rewards which all contribute towards building a positive culture and boosting morale – i.e. subsidised café and healthy food, flexible working hours, gym memberships etc.
- Relaxation time – be generous and considerate towards employees with time off. This is important in view of maximising the efficiency of your employees and improving employee relations. Providing public breakout areas is extremely important in view of refreshing employees and giving them the space to innovate and be creative.
The effective implementation of these five R’s will not only help retain employees but will also boost the productivity and morale of the team, maximising business performance. Employees who are “engaged and thriving” are 59 per cent less likely to look for a job with a different organisation within the next 12 months. If you want to gain long-term commitment and get the greatest long-term value from your staff, you should implement these strategies and give them a reason to stay with your company.
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