Keeping people is arguably one of the most challenging aspects of running a business today. All companies, regardless of size, industry or geography, are struggling with how to keep employees from leaving for more money or better opportunities. Research consistently shows that even though employees may say they are leaving for more money, when those same employees are asked several months later why they really left, the money factor is about 5th or 6th on the list. The first several reasons include not being engaged or connected with the company or their direct manager, lack of excitement about their growth prospects, lack of recognition, disagreement with the culture or direction of the company, poor treatment by their boss, and poor relationships with co-workers.

Engaging of employees is key to their retention. The Gallup organization says, “Employee engagement or the ability to capture the heads, hearts, and souls of your employees to instill an intrinsic desire and passion for excellence. Engaged employees want their organization to succeed because they feel connected emotionally, socially, and even spiritually to its mission, vision, and purpose.”

Did you know that studies have indicated that it will cost a significant amount of money to replace an employee? How much? When you add the costs of finding an employee, training the new employee, lost productivity and filling in for the employee who leaves, the cost can easily equal 150% of the base salary of the person who left. So, if you are paying someone $50,000, the cost to replace that person will be approximately $75,000. This money comes out of your hard-earned profits. That is why employee retention is a bottom line opportunity. If you improve your retention figures, your bottom line will grow, even if you do nothing else in the business to grow!

This is one of the key reasons that companies are focusing so much effort on keeping their current employees. How can you increase your chances? Two key strategies come to mind: On-Boarding and Exit Interviews. Allow me to unpack these for you.

The on-boarding method focuses on ensuring that as new employees are hired, they have the opportunity to be engaged right away. When this happens, the likelihood of that employee making a commitment to stay is increased significantly. When commitment is made, performance, productivity and results are more likely to be profitable for the organization. Extra benefits include this engaged employee’s likelihood of telling his or her professional colleagues of their great experience at this company, suggesting they consider joining the company, thereby reducing your recruitment and hiring costs considerably. It just makes sense to ensure that each new employee is given the chance to become engaged and committed. This happens when the on-boarding process is intentional.

On-boarding is not the same as new employee orientation programs. Orientation programs generally focus on providing some of the history of the company, an explanation of benefits, ensuring the important documents are prepared, signed and processed accordingly and going over some of the basic policies of the company. This is important, but it generally does not have the “engagement” component that is mentioned above. On-boarding is that process of providing an engaging environment. Engagement leads to commitment and connection, which leads to productivity and contribution. Progressive organizations will consider using the services of an outside firm who are skilled at on-boarding. In addition to the objective information gathering already discussed, this will also allow internal resources to spend more focused time devoted to assignments that can only be done internally.

The exit interview method focuses on why people are leaving, so the company can do something about changing those reasons that people leave. Some companies use their internal HR staff to conduct exit interviews with departing employees. Usually, such meetings focus on how much vacation time is left that the employee may be paid for, turning in keys and ID cards and other important administrative matters.

They may even explore where the person is going and why they decided to leave. Typically, they respond that they have been offered more money. Unfortunately, this does not get to the root cause of why they are leaving. More money may be an outcome, but, as mentioned above, is generally not the root cause. According to a recent article in Workforce Management Online, “No matter how well a company representative may have been trained [in conducting exit interviews], there will always be those departing employees who do not feel comfortable opening up with any [internal] representative of the organization.”

Utilizing the services of an outside, independent organization to conduct exit interviews after the person has left has shown to deliver rich information the company can use to bolster their retention efforts, reduce their employee turnover and therefore increase the bottom line profitability of the company.

Employee retention is a bottom line opportunity. Costs are escalating all over. Raw materials that rely on energy are increasing as are transportation costs. It is a well accepted fact that repeat business is far less expensive to obtain as compared to obtaining new business. The same applies to employees — it is far less expensive to retain employees than it is to recruit and develop new employees. Successful and growth oriented companies are realizing they need to be smarter about retaining their best employees, not only because of the costs, but also to prevent the competition from using the skills of your former employees to their competitive advantage.

What are you doing to retain your employees?