Across the board, employee retention is essential to ensuring the long-term success of your organization. However, it’s even more important to retain your top employees for two reasons: First, losing your top talent is way more costly to the success of your company than losing a low-level employee. Second, a recent study by market research organization Gartner revealed that these top-level employees—i.e. your most skilled, high-impact workers—are increasingly likely to leave.
Why is retaining my top employees important?
When one of your top employees leaves the company, costs will accrue far beyond your expectations. According to PeopleKeep, if you lose a manager whose salary is approximately 40k per year, you’ll spend 20–30k in recruiting fees alone, since you’ll have to advertise the position and then go through a labor-intensive screening process. Recruitment fees increase for higher-level employees, since replacing CEO's and executives oftentimes require the services of a headhunter. Especially in a hiring shortage, rates for recruitment can increase since there is more competition for fewer qualified candidates. Once you do finally find the right candidate, you’ll face the costs of training and onboarding an employee for a highly skilled position.
But the fees don’t stop there. When you lose a top-level employee, their responsibilities don’t go away. Rather, they are absorbed by the existing workforce. This can create issues with organization, delegation, and morale. The people who take on these tasks will not be as experienced, so mistakes will inevitably happen, which you’ll spend time (and money) fixing. You’ll feel the strain across the board, as you’ll also struggle to maintain the integrity of the company culture.
How can I retain my employees?
In order to retain your top-level employees, you need to foster a workplace where your employees feel heard. You need to communicate openly, frequently, and honestly. You can formalize it to whatever extent makes sense for you: large organizations will need a more robust online feedback system, while smaller companies can perform informal weekly meetings and check-ins. By creating this kind of environment, you’ll have your finger on the pulse of your organization. This is the preventive care of employee retention—you’ll be able to anticipate and identify problems early, and nip them in the bud. Of course, communication goes nowhere if you don’t act on it. Your employees need to feel like they are being heard—that’s a great start—but unless they see managers and executives acting on those concerns, you’ll still face issues with retention.
One of the main reasons why top-level employees leave is because they feel stagnant. This is why it’s critical that you provide a visible career path within your organization. Employees want to feel that in five years, they’ll have more responsibilities, know more skills, have a greater leadership role, better benefits, and more money. If you’re not giving them the chance to grow, they’ll start looking elsewhere. Additionally, one of the best ways to retain your employees is to provide meaningful perks. There’s no substitute for a good health plan, paid time off, flexible hours, and remote working options. Small amenities like casual Fridays and complimentary gym memberships simply don’t cut it.
Fostering long-term success
When you lose a top-level employee, it’s clear that the costs add up and can become incredibly burdensome on your company. The only way to prevent this calamitous situation is by being proactive. Retention problems don’t start as retention problems—they start as issues with company culture, and employees feeling like they have no future. If you can address these business fundamentals, then you’ll be able to address the root cause of retention problems so that your organization stays on the path to success.