What Is The Real Cost Of Employee Retention?

Hiring costs small businesses and start-ups a lot of money. On average, small businesses can spend anywhere from $1,000 to $4,000 per new hire, just getting them recruited and onboard. There are plenty of other costs of hiring new employees. No wonder small businesses are so hesitant to hire, even when putting it off creates productivity issues. No one wants to see new hires walk right back out the door. What can be done to keep employee retention high without draining the bank account?

Would you want to work at your place of business? This is the first thing every entrepreneur should be asking themselves. You might love what you do, but does everyone else? How excited are your employees about getting the job done week after week? It’s a hard question every entrepreneur must ask themselves if they plan on keeping employee retention high.

Employee Retention Requires Acceptance Of A Few Things 

There a few things entrepreneurs need to get their minds around about having employees. If you’ve been at this hiring thing for a while, you’ve realized you can’t do everything yourself and keep your sanity at the same time. No man (or woman) is an island. This same premise goes for finding, managing, and maintaining employees. 

For instance, let’s say you need to hire a marketing manager. What is required for skills to make a marketing manager qualified to do their job? What special marketing skills do they need to have to be successful in your business? These are fundamental questions to ask. If you don’t know what to look for, your chances of finding the perfect one the first, second, or even the third time are pretty slim. 

If you want to keep employee retention high, you need to do everything you can to make sure you are hiring the right people in the first place. This may take an honest appraisal of realizing you don’t know what you are looking for and trusting outside help to find them for you. Most entrepreneurs who have called a hiring agency become quickly turned off by having to pay fees to find new employees. The reality is this: they are much better at finding qualified candidates for all kinds of jobs than you are. Entrepreneurs are good at what they do; that is why they have a company doing that. Trust the experts to find the right candidates, and you will likely be paying less in the long run because you’ve found a good fit early on.

Many agencies and PEOs offer guarantees with their hiring fees, so the risk of using one to find the right candidates is pretty low. Let the proper resumes and candidates come to you to keep employee retention high.

Keeping Employees Is More Than A Fat Paycheck 

A lot of entrepreneurs make the mistake of thinking high pay is the key to keeping employees put. They couldn’t be more wrong. The simple truth is that you can’t pay people enough to stay miserable. No matter how much they are making, it won’t take long to find a permanent solution to their unhappiness in your firm. Now that we know that a big paycheck alone won’t cut it in keeping employee retention high, what can be done?

For sure, you need to offer at least competitive rates when looking to retain employees. If your pay rates are coming in on the low side, you’ll have to provide something else that makes up the difference. Free snacks and Beer Friday are not going to work either.

You might have guessed it, but excellent benefits are an essential part of keeping employee retention high. Employees consider benefits offerings as part of their compensation. If you don’t offer excellent benefits, it won’t take long for them to find other opportunities that, in their minds, are more interested in keeping them around. 

You don’t have to go bankrupt looking for benefits to offer your employees. PEOs are an inexpensive solution to not only finding benefits at rates a small business can afford but lots of other great perks and HR services as well.

HR Is A Complex Thing To Overlook 

Employees don’t stay when they don’t feel like they have any recourse if there is an issue in their workplace. Many entrepreneurs do not realize how important it is to keep up with HR Law and keep procedural documentation in good order. Employment laws exist for a reason. If you don’t keep up, not only will you risk losing great employees, but you could also wind up with legal trouble as well.

PEOs Are The Best Solution For Employee Retention Issues 

Have you ever considered a PEO? If you are looking for help with employee retention, a PEO is a great place to start. Not only do they provide entrepreneurs with excellent benefits options everyone can get excited about, but they help with hiring, HR Law, and payroll services too. What else could a busy entrepreneur hope for? Employees want to feel valued. If you're going to keep them for years to come, a PEO is the best solution for employee retention. If you’d like to find out more about what a PEO can do for your business, contact us today for a free consultation.