Employee Retention vs Employee Turnover

Keeping employees happy and engaged is an essential part of running a successful business. Having low retention and high turnover rates can result in a significant loss of time and money. In this blog post, we will explore the difference between employee retention and turnover and how HRM software can help businesses keep their employees satisfied.

Employee Retention

Employee retention refers to an organization's efforts to keep its employees enrolled in their workforce. It focuses on retaining qualified and high-performing employees by creating a work environment that is satisfying and fulfilling.

The benefits of employee retention are numerous. It saves money, saves time, and increases overall productivity. Moreover, employees who stay longer in the company are generally happier, avoid unnecessary stress, and have become contributors to the company's growth.

In fact, the cost of replacing an employee can be astronomical. According to the Society for Human Resource Management (SHRM), the replacement cost of a highly-educated employee can reach up to 213% of their annual salary.

Employee Turnover

Employee turnover, on the other hand, is the number of employees that leave a company and are then replaced by new hires. It is a measure of how well a company retains employees.

A high turnover rate can be a red flag for a business. It can cause morale issues and result in lower productivity, which can have severe consequences on the organization's growth.

In the United States, nonprofit organization Work Institute has released a report that shows the cost of turnover in 2021 is $680 billion. This number highlights the importance of managing employee turnover effectively.

How HRM Software Can Help

Using HRM software can help businesses retain their valuable employees and reduce turnover. HRM software solutions can keep track of employee satisfaction, identify issues, and provide feedback on how to remedy problems.

By using HRM software, companies can conduct employee surveys, obtain feedback, and create strategies to address employee concerns proactively. HRM software can also help businesses automate time-consuming HR tasks, such as payroll and benefits administration, which can free up time for HR managers to focus on employee engagement and retention.

Overall, investing in HRM software can be an effective way for businesses to improve their employee retention rates, reduce employee turnover, and save time and money.

Conclusion

Employee retention and turnover are essential components of human resource management. Investing in HRM software can be a cost-effective way for businesses to manage these metrics effectively. By keeping employees satisfied and engaged, businesses can reduce turnover, save money and increase productivity, which leads to success, growth, and increased profitability.

References

• Society for Human Resource Management (SHRM), The High Cost of Hiring the Wrong Person
• Work Institute, 2021 Retention Report