One of the goals and priorities of many business owners across the globe is high employee retention. Once you spend a significant amount of time and energy recruiting, interviewing, and training an employee, the last thing you will want to have on your desk is a resignation letter. As a business owner, you want a full commitment from your employees; you will also want them to stay around so your vision can come to life.
The estimated cost of losing one employee can cost up to twice as much as the employee's' salary? The financial burden will continue to grow based on the employee's position. For instance, the turnover cost for an hourly worker can cost up to $1,500 per hire.
With unemployment rates falling to their lowest in 50 years, we are now part of the ''employee'' marketplace and not the ''employer'' marketplace. Today, job candidates can work from nearly anywhere, doing whatever they want. Due to the shift in the market, many job candidates do not find many reasons to remain loyal to one company.
Today's workers are discovering that there is a special type of leverage in their position. They are using this leverage to be included in the type of work experience they desire. Against this type of change, any business needs to promote an environment where employees feel like they belong. One way to encourage this environment is to partner with a PEO (Professional Employer Organization).
Professional Employer Organization
As the workforce’s evolution continues, small businesses and mid-sized businesses are progressively partnering with Professional Employer Organizations (PEOs) to aid with sourcing and retaining talent. A PEO allows companies to outsource multiple employee management tasks.
Through a partnership with a PEO, employers can significantly streamline and simplify their most essential HR operations by allowing the PEO to take on less critical tasks.
Employee Retention Strategy
We understand that creating effective retention strategies and carrying out recruitment initiatives can get pushed back when there are so many responsibilities, such as training employees, payroll processing, and benefits management. A partnership with a PEO will provide your business with a wide range of services to support HR.
If an employer does not have the in-house resources, there will be a struggle to recruit and maintain talent. A PEO and its recruiting team will have the experience and the skills to help create job descriptions, create training sessions for interviews, draft offer letters, and more.
Employee retention strategies can be incredibly multi-faceted. If your business does not have a comprehensive employee retention strategy, it is certainly time to create one. The employee retention strategy will need to be based on a solid foundation of recurrent engagement and growth. Effective programs in an employee retention strategy should include:
- Ensuring employees are engaged
- Investing in employees
- Acknowledging the contributions the employees have made to the business
- Building a positive culture that encourages growth
When improvements are made in the above areas, you will keep the turnover rates low and allow employees to see a long future with the business.
Another critical service offered by a PEO is their performance management support. A PEO can help your business design and oversee employee performance evaluations. A PEO can also provide you with legal compliance assistance and workplace training on topics like the following:
- Team building
- Employee counseling
- Compliant procedures
- Violence in the workplace
- Sexual harassment
- Substance abuse
- Termination procedures
When there is access to the resources, assessments, and training listed above, this will encourage employees to grow and develop skills to make them an asset to your growing business.
Employee Separation Process
If an employee decides to part ways with your business, this will create an opportunity for you to understand why the employee decided to move. If there was a specific reason why the employee chose to leave, you could use this opportunity to learn what can be done in the workplace to improve the workplace culture.
The relationship should be closed on a positive note by showing the former employee that their thoughts and opinions matter and take the appropriate steps to improve the future. Unfortunately, many employees will just say ''goodbye'' to a former employee and not ask any questions.
A PEO's team can help you create an employee separation strategy that will include the development of policies and procedures, the creation of severance packages, and the introduction to exit interviews.
Employee Retention Through Engagement
Employee engagement and employee turnover — is there a connection?
Studies have discovered that employees of companies with a PEO are generally more engaged than the employees of companies that have not partnered with a PEO. This same study also found that business employers who use a PEO have an employee turnover rate that is 10-14 percent lower than that of business employers with a PEO.
Through a partnership with a PEO, business owners no longer have to feel burdened by all the administrative and financial tasks daily. With a PEO, business owners will create strategies that will foster a lively and engaging work environment. Through this positive work environment, employees will receive the best resources and techniques to help them feel confident in their work and confident in the company.
Employee Retention Through Competitive Employee Benefits
Competitive employee benefits are a key reason businesses that partner with a PEO have a lower turnover rate. There are many things to talk about when it comes to competitive employee benefits packages. Every company will have its own needs and its own culture. The benefits you offer to your employees should reflect your culture.
When your employees feel appreciated and secure in their position, these things will greatly impact your turnover rate. However, it is crucial to find the right mix of employee benefits. Partnering with a PEO will give your business access to the PEO's resources, allowing you to create a competitive employee benefits package for your employees.
A PEO can group employees through a co-employment relationship with all of its clients. As a result, a PEO can offer the top benefits to its clients.
A PEO will represent each worksite employee from every client. This means that the PEO will not have to jump through hoops just to pay insurance for ten people. Instead, the PEO will purchase insurance for 10,000+. As a result, even a small business will obtain the same results as some of the top companies in the world.
Employee Retention Matters
Retention of positive employees and motivated employees are critical to the success of a business. A high turnover rate will increase business expenses and leave a negative impact on the company. High-quality employee retention strategies will help support productivity and engagement. A PEO can be used to increase employee retention, and the partnership, on average, will lead to a 27.2 percent return on investment.