Employee retention is no simple matter. It’s an important part of running a small business. After all, how would you be able to grow your business and clientele if you’re a one-man team or if you’re constantly needing to find new people to fill the gaps in your business?
In this post, we’ve rounded up several numbers and statistics that can help you improve employee retention. After all, as Sir Richard Branson of the Virgin Group said: “Take care of your employees and they’ll take care of your business”.
Burnout is the cause of at least 50% of annual employee turnover
What would you do if you woke up tomorrow to an email inbox saying half of your employees resigned because they are burned out? You would be sent into a flurry of putting up new job vacancy announcements, starting your hiring process, and finding additional hiring personnel if necessary. In addition, employee resignation causes a lot of extra documentation and processes as employees begin to turn over their work. While an en masse resignation is very unlikely to happen, the consequences are the same. When an employee resigns, a possibly long and arduous hiring process begins while turnover is happening.
According to Forbes.com, burnout causes at least 50% of annual employee turnover. That’s why it is so important that workplaces are supportive towards employees’ mental and emotional well-being. As reported by Indeed.com, burnout is similar to stress but lingers for much longer. Employee burnout can cause poor performance at work, loss of enthusiasm towards work, low energy, and an increasing apathetic attitude at work.
Not surprisingly, most of the people who experience burnout are the high-performing ones because the tendency is for them to keep going until they reach a block. Losing your best employees to something that can easily be addressed or prevented is a shame, which is why it’s important that you take care of your employees and listen to their feedback.
A higher retention rate can help maximize a company’s profits up to 4x
Legaljobs.io reported that improving your employee retention rate can help maximize a company’s profits. It costs companies about 33% of a worker’s annual salary to replace an employee back in 2017. You can imagine that with inflation, rising wages, and other costs that number will be much higher this year.
Just to give things a bit more context – a worker earning $45,000 a year will cost about $15,000 to replace. When an employee resigns, there are a lot of things you should consider, such as lost company knowledge; the time, effort, and manpower you need to find a replacement; and the time it takes to fully onboard the new employee to get them up to par with the person they are replacing.
Just imagine how much money you could invest into your business rather than spending it on replacing a disgruntled employee.
42% of employees say that inadequate benefits packages makes them consider leaving their current jobs
Remember that it’s not just about the free lunches, ping pong tables, or competitive salaries that make employees stay with you. Randstad US reported that 42% or almost half of the employees say that inadequate benefits will cause them to reconsider their current employment.
Aside from providing your employees a conducive and opportunity-laden growth environment at work, it’s also important to give them benefits that will help them prepare for the future or enrich their lives, personally and professionally. With that in mind, benefits are the easiest way to show employees that you care and that you’d like for them to stay with you long-term.
Now speaking of employees leaving due to inadequate benefits…
45% of employees have jumped companies due to better benefits
In the same report, Randstad US also mentioned that almost half of the interviewed employees have jumped ship because they found another place that offered better benefits.
This statistic proves that benefits can be a huge factor in helping you keep your employees around for a long time, saving you the cost of replacing employees that have resigned. In addition, adding or creating better benefit packages for your employees will improve their engagement so that they can perform at their best and continue to add value while working at your company.
For 1 in 3 of employees, benefits would increase loyalty to their employers
As mentioned above, benefits vastly improve employee engagement. By extension, this also increases employee loyalty to the company. According to Metlife, 1 in 3 employees or about 33% believe that if benefits were offered, their loyalty would improve.
Remember that the more loyal your employees are, the less likely they are to look elsewhere or be swayed by offers from other companies. Benefits motivate employees to stay in order to keep reaping those benefits and at the same time, benefits that grow with tenure, such as retirement plans, are a huge incentive for them to stick around.
40% of employees think that their employers are not offering benefits or programs that help
But be careful when you start offering benefits and programs to your employees because according to the same Metlife report, almost half of employees feel like the benefits being offered are not useful.
This is why it’s important for you to listen to your employees. If you’re not sure how to go about this, you can always send out surveys, conduct 1:1s, or have a town hall. If employees are still shy to assert their wants and preferences, you can always make sure that feedback is accessible through anonymous forms that can be submitted to HR.
After all, if you’re going to be spending money on it, it’s important to make sure that it’s going to be making a positive impact on your employees. Spending on benefits that are unhelpful or will be unused will simply be a waste of precious resources.
Only 56% of workers were enrolled in a workplace retirement benefit in 2021 and 82% of workers are on self-funded savings and retirement plans
One benefit that will certainly be useful no matter the employee or trade is retirement plans. After all, everyone ages, and anyone can use a hand in preparing for the future. There’s no such thing as too much retirement money, right?
Annuity.org reports that only a little more than half or 56% of workers were enrolled in a workplace retirement plan. On top of that, a majority of those without retirement plans are on self-funded savings.
As you can see, there is a big gap that businesses or employers like you can fill on that front. If retirement plans are something you’re not yet offering as a benefit to your employees, then you should consider doing so.
How can peppermint help you fill the gap?
Peppermint is a pooled plan provider (PPP) that helps businesses of any size and in any industry provide 401k plans to their employees through a pooled employer plan (PEP.)
A pooled employer plan enables SMBs to offer their own 401k by joining a pool where other businesses can also put in their resources and investments. This pool consolidates the funds from all the other businesses into one 401k fund. The pooled plan provider (like peppermint) then liaises with entities like trusts, fund advisors, and plan administrators to reduce the administrative burden on your end.
If you’re interested in getting a PEP 401k for your small business in order to help retain and attract amazing talent, then you can contact us by:
One of our retirement planning specialists will get in touch with you as soon as possible.