Increase Your Bottom Line by Retaining Employees
Before you let your employee resign, you might want to think about ways to retain them. Employee turnover rates are costing companies staggering amounts of money each year. According to the Society for Human Resource Management (SHRM), it costs $3,500 to replace an $8 per hour employee. Now, think about that with a different level of salary and the cost becomes astronomical:
- For entry-level employees, it costs between 30-50 percent of their annual salary to replace them. For example, if you lose two entry-level employees in one year, at 40% of the average salary of 40,000, will cost $16,000 per employee to replace them. So losing only two employees would cost your business $32,000.
- For mid-level employees, it costs upwards of 150 percent of their annual salary to replace them.
- For high-level or highly specialized employees, you’re looking at 400 percent of their annual salary.
To think about those percentages in more tangible terms, you can really just do the math. If you lose an entry-level employee, at 40% of an average salary of 40,000, it will cost $16,000 to replace them. If only one mid-level employee with an average salary of $80,000 decides to resign, it will cost your business $120,000. If a top level executive leaves you, with an average salary of 120,000, it will cost $480,000 just to replace them. As you can see from this real-world example, it is worth your while to invest in your employees.
But what does investing in your employees really mean?
By providing employees with raises and giving them a good benefits package will certainly help to retain your valued employees, salary and benefits aren’t the only reason that people quit their jobs. Other factors such as company culture, meaningfulness of the work they are doing and recognizing a job well done to name a few. On way to help retain your employees and allow them to feel comfortable and valued in your organization so that they never want to leave is through office design.
As you can see from these statistics, employee turnover is incredibly expensive. Aside from the financial burden, there are other ways that employee turnover impacts a business as well. For instance, advertising, interview expenses, the cost of training and onboarding prior to and during the hiring process. Not to mention that often when a new employee is hired, productivity takes a hit while the new employee adjusts to their position. Because of the tremendous impact that employee turnover has on a business, it only makes good sense to have a strong employee recruitment and retention policy firmly in place.
Office design is an often overlooked aspect of employee recruitment and retention. By using strategic office design, you will see an immediate return on investment when comes to your employees. Consider incorporating the following design features to enhance your workspace.
OPEN OFFICE LAYOUT
An open floor plan encourages teamwork and collaborative efforts amongst staff. Allow them the choice by including open and enclosed spaces, comfortable lounge areas, and quiet rooms where they can choose the optimal work space. Providing employees choice pays off. According to Dana Manciagli, a global career expert, “companies that grant employees choice grew more and had one-third the turnover versus more traditional organizations.”
Technology is changing very rapidly and these technological changes have altered the way people work, so having technology that supports a culture of collaboration, innovation and creativity is a must to attract and retain top talent. WIth up to date technology, employees will gain added flexibility, remote access and improved collaboration.
With people spending more and more time working, employees want their office to feel more like home. Offices should include comfortable seating areas, kitchens and cafes and perhaps even game rooms or areas to have fun. Including areas in the workspace that are comfortable and inviting will allow employees to feel more satisfied with their jobs. By providing the new workforce with the comforts of home and breakout spaces with a relaxed and social vibe, it will create a positive work environment that is enjoyable to spend time in.
REPRESENT YOUR BRAND AND CULTURE
Representing your company’s brand and culture through office design will appeal to top talent because they want to feel meaning and connection to the organization for which they work. So as recruits walk through your door, they should be able to immediately sense who you are as an organization. From the logo and colors, to the furniture and even having the values on visual display will be a huge selling point for potential employees.