New employees always come with a high price tag. In fact, a Society for Human Resource Management (SHRM) study found that replacing a salaried employee costs between six to nine months’ salary on average. And when it comes to IT recruitment the actual sourcing costs of bring on a new employee can be even higher.
This is especially true for organisations that are looking to develop new technologies and stay ahead of the game in areas such as analytics, social media and web design.
The revenue and cost companies lose when deadlines are missed in this field can be far greater than the cost of replacing an employee, which is why retaining IT staff is more crucial than ever before.
Companies are starting to listen to the research, with one study finding that in 2009 only 30 percent of companies were concerned about retention compared to almost 60 percent over the last four years. In tech, it’s even higher – at 70 percent.
In the tech world this enormous outlay usually lies in the huge mismatch between the demand for skills in new technologies vs. the supply. For example, if you suddenly need a Java developer the chances are that you will need to hire one, not train up an existing member of staff to do the job. However, this is a short-term fix. This new member of staff has entered the business without a well-constructed career pathway and retention plan, and it has cost your company a lot more money than keeping or re-training an existing employee.
Without a key retention plan, the employee is likely to become redundant when a new specialised skill comes up again and unable to fulfill evolving positions. This cycle leads to companies seeking a new member of staff yet again at an extremely high cost from a very limited talent pool.
There is a distinct lack of long-term planning for new and existing employees within IT. However, some companies have started to implement successful retention programs that have shown significant improvements in turnover rates, but it’s a struggle. Plans such as these can also require a significant outlay and so many smaller companies and not-for-profit organisations can find themselves back at square one.
Developing a retention plan is also a difficult task. There is no one way or one rule, and what works for your company might not work for another company in your field even.
The key mistake that many companies make is to focus on what they think their employees want, and not what they actually want. Many retention plans include elements such as compensation, benefits and career advancement – but is this what IT employees are really looking for?
For the changing workforce, there seem to be some retention strategies that have worked well, if you…
- Accommodate and understand generational differences in your workforce. You cannot have just one retention plan for all ages. Consider how Millennials perceive the world of work and address their concerns if you want to attract this generation of workers.
- Design your plan to incorporate feedback and notes from real employees about your company.
- Allow flexibility in terms of career goals and working arrangements.
- Be as transparent as possible about your corporate goals and employee compensation.
- Train up your line managers to understand and adapt to the attitudes of their workers.
There’s no question that retaining great employees is difficult, and it seems to be getting harder and harder. Organisations need to recognize the reasons that employees leave and ensure they have planned the best environment to make them stay. It’s time to really think about your employee retention strategy.
Read more about how to implement an employer retention strategy and keep good staff with some of these articles below:
Where to begin with your retention strategy
How to get the most out of your recruitment strategy
How effective is your retention strategy?
This article first appeared on www.randstadusa.com