Employee Retention 

Retention is the rate at which current employees of your organization are staying in their jobs. Retention is the opposite of “turnover.” Therefore, if turnover is low, then retention is high.

When crafting a Strategic Diversity Management Plan, retention is often framed as a key economic driver for diversity & inclusion efforts. It costs an organization a significant dollar amount whenever an existing employee must be replaced. These costs include termination processes, recruiting a new employee, onboarding processes and decreased productivity in response to the new employee’s learning curve as he or she acclimates to the new position. Diverse & inclusive organizational climates, however, reduce turnover and increase retention. Retention is also important for an organization in intellectual and cultural terms. Organizations with high turnover (and low retention) often suffer from “brain drain,” a situation in which few individuals contain the organization’s long-term memory. Organizations with high retention (and low turnover) typically have strong, sustainable corporate cultures that can act as key differentiators in the marketplace. It is important to note that no organization can claim 0% turnover, and that new talent can often bring new energy to an organization; still, keeping retention high is a crucial success factor to consider.

Employees will decide to stay or leave an organization for a number of reasons. Many seek new opportunities outside their current organizations in order to find increased pay, more responsibility, a more agreeable commute, more challenging work or a friendlier work environment. Others may leave because they are relocating to a new city, and still others might be leaving the workforce altogether for any number of reasons. An organization cannot reasonably be expected to be all things to all employees; therefore, a certain amount of turnover is to be expected. However, there is much that an organization can control; organizations with healthy retention rates typically make a concerted effort to be an “employer of choice” within their industry, offering all employees competitive pay, opportunities for advancement, challenging work, and a diverse and inclusive work environment. The Level Playing Field Institute of San Francisco, Calif., reports that unfairness in the workplace costs U.S. employers $64 billion on an annual basis (this figure does not include discrimination lawsuits, which can be even more costly in terms of dollars and damage to a company’s reputation).

1. What is our organization’s current turnover rate? How does this number compare with those of our chief competitors?
2. How much does it cost our organization to replace a single employee?
3. Who typically leaves our organization? Are there marked differences among turnover rates for men versus women? White people versus people of color? Baby Boomers versus Gen X or Gen Y staff?
4. Does our organization conduct exhaustive exit interviews to find out why employees are voluntarily leaving? If so, what do these interviews tell you about why employees leave?
5. Is there any reason to suspect that those who feel excluded, unfairly treated or discriminated against would refrain from stating their true motivations during an exit interview? If so, what measures could be put into place in order to collect more accurate data?

Communicate efforts to increase retention and reduce turnover in financial as well as numerical terms in order to tie these efforts toward business goals.

Giving Notice: Why the Best and the Brightest Leave the Workplace and How You Can Help Them Stay, Klein

The Deadly Sins of Employee Retention, Murphy & Burgio-Murphy