The Importance of Employee Retention in a Healthy Economy


Human Resource metrics can reveal information that can help your organization identify the causes and patterns of employee turnover. Employee retention is again becoming a problem for employers. During recent economic trouble, employees were staying put, but now, the economic climate is improving, and employers must take a serious look at how to retain their best talent.

In November of 2011, an online survey indicated that more than 84 percent of employees wanted to find new jobs. This survey was conducted on a cross-section of 1,000 people across the United States and Canada. Another survey conducted by Mercer revealed a shocking revelation: Workers planned to search for a new job. The initial survey was done in 2005, and the numbers indicated that 23 percent of workers wanted to search for a new job. In 2010, the numbers had jumped from 23 percent to 32 percent.

Human Resource professionals must measure voluntary turnover versus involuntary turnover. In short, turnover simply means the number of employees that stay in an organization versus the number that leave the organization. The focus should primarily be on the voluntary turnover. Employers have to take a serious look at retention. Some turnover is healthy; it helps weed out the low performers and trouble makers, but how does an organization know how much is healthy?

HR professionals must benchmark the turnover in their organizations to determine what level of turnover is harmful to the business. One way to improve retention is to improve hiring practices. Hiring the right people is a significant way to improve employee retention. Bringing candidates in for a multiple-interview process can produce better hires.

HR professionals must keep an eye on those employees that are most likely to leave. This requires being in sync with the morale and engagement of top performers. Exit interviews are one important way to get feedback on why an employee is leaving the company.

Research has indicated that an exit interview done immediately after leaving the company will be more negative than one done several months later. There is more emotion involved immediately after exiting the company. Employers must look at the data of retaining top employees. Employee turnover is costly, and it impacts the bottom line of the organization.