Grow employees to raise retention

By Marge Watters
|CHRR, Guide to Recruitment & Staffing|Last Updated: 02/24/2002

The CEO of a Web site design firm recently sent a letter to his clients giving them an update on the business, which had enjoyed steady growth through the burst of the bubble and the economic slowdown. The letter said, “ One of the key reasons for our success has been our staff retention rate of more than 90 per cent.”

When asked how this was achieved in the intensely competitive high-tech arena, he responded, “We make a point of constantly talking to our people to determine what they want to learn next, what skills they want to develop and what sorts of positions and projects they aspire to.”

To this CEO and to most HR professionals, the case for retention is clear. For those who need to be convinced, three points should suffice. First, turnover is costly. Counting only the easily quantifiable costs of replacing an employee, such as hiring, relocation and training, the price tag is usually pegged at 1.5 to 3 times salary. Hidden costs, such as lost productivity, customer dissatisfaction, lost revenue and reduced morale, are seldom considered.