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The cost of NOT investing in people
Think of the most fulfilling job you’ve ever had. What made it great? Chances are you were making a difference, paid competitively and appreciated for your contributions.
Consider these stats
- According to AON Human Resource Consulting, 41% of employees don’t feel valued by their organization and 40% of employees plan to look for a new job within the next six months
- A HR.com and Lifeworks study found 80% of workers will look for another job if they don’t feel like they’re valued
- Gallup states 51% of employees are already searching for a new job/watching for openings
Money alone won’t keep employees with you. There will always be a company willing to pay more than you for talent and guess what…even employees being paid market rates tend to think they’re underpaid. A talented employee who feels his/her skills and/or productivity are being taken for granted will inevitably find offers promising a better culture, work-life balance AND bigger pay cheque.
The hard costs of NOT investing in people
If these numbers are true, then 50% of a typical workforce is at risk of leaving, costing organizations on average 33% of each employee’s salary to replace each position. This adds up and doesn’t even factor in lost productivity and negative impact on morale caused by turnover.
There are opportunity costs too
Gallup says engaged employees are nearly 60 percent less likely to look for greener employment pastures and that highly engaged business units experience:
- 21% greater profitability
- 41% reduction in absenteeism
- 17% increase in productivity
- 10% increase in customer ratings
- 20% increase in sales
Organizations with engagement scores below the top quartile can’t afford NOT to have programs in place to recognize and retain their people.
Progressive organizations are investing in social recognition and performance programs to make it easier for managers and peers to give non-monetary recognition and monetary rewards employees value and appreciate.
How to boost your recognition and engagement scores?
80% of the changes that drive revenue growth come from initiatives focused on human capital so here are a few initiatives that will impact retention and your engagement scores.
- Keep employees challenged and advancing – Stagnating in a role for an additional 10 months raises the odds employees will leave the company for their next role by about one percentage point, which is statistically significant. (Glassdoor)
- Pay competitively – people don’t leave for money alone but it is a key reason why they start looking around. A 10% higher base pay is associated with a 1.5-percentage-point increase in the likelihood workers will stay with you, a statistically significant link. (Glassdoor and Harvard Business Review)
- Refresh your Onboarding program – 98% of executives say onboarding programs are a key factor in retention efforts. (Korn Ferry)
- Offer Flexibility – 74% of workers said they would quit their current jobs to work for an organization offering remote-work options (Softchoice)
- Target Stress – 46% of human resource leaders say employee burnout is responsible for up to half of their annual workforce turnover. (Kronos)
- Promote from within – 83% of employees with opportunities to take on new challenges say they’re more likely to stay with the organization. (ReportLinker)
- Foster teamwork and peer recognition – 49% of employees cited coworkers as a reason to stay over salary. (Ceridian)
Employees want to be paid fairly but more than that, they want to feel connected to their jobs, managers and companies. If “quality of life” rewards such as appreciation, flexibility, benefits and a positive culture aren’t there, there’s more incentive to quit, leaving organizations to start the costly recruitment, hiring and onboarding dance all over again, not to mention costing you the best people.
CSI STARS helps you recognize your people with personalized awards, social tools and performance based rewards tailored to your needs for ALL employees ALL year long. Get in touch now to discuss how we can help you with your 2018 recognition goals and initiatives.
Lori is Vice President Marketing for CSI STARS and a Certified Recognition Professional. Prior to CSI she worked at Mercer Human Resource Consulting and Youthography, a youth market research agency. Connect with CSI STARS on LinkedIN to learn how we help organizations cultivate a workforce that loves coming to work.