Reducing the Cost of Employee Turnover by Managing for Retention

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Reducing the Cost of Employee Turnover by Managing for Retention

Employee turnover and the retention of valued employees are major problems facing business in the U.S. The average turnover rate is hovering at 15%. The costs associated with that turnover can be high - generally 25 percent of the individual's annual salary. Unemployment in the United States is at a 24-year low. Employee loyalty is down. Never before has it been so critical to focus on strategies for keeping good employees. However finding a solution to high turnover is not easy.

One major incentive for retaining employees is the cost of turnover. Keeping good employees increases profits. Employee turnover is a direct drain on the bottom line. Another incentive for
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Why Does Top Talent Jump Ship?

The job market is competitive and the labor pool is shrinking. Employers are more and more frequently vying for the same candidates. The tight labor market is likely to play increasingly important factors in why some companies are losing their top talent. The current economic situation has created an increase in the amount of employment opportunities and companies are trying everything to woo employees away from their competitors.

It is predicted that the job market this year will be the best this decade. Governmental efforts to reduce the budget deficit have led to a reduction in interest rates, which allows business to grow. The U.S. has also grown more competitive in the international business community, which also contributes to an increase in job opportunities. The renewal of the economy has increased some firms sense of national confidence and when businesses feel more confident of the economic future, they are more likely to expand and hire more employees.

Although a good economy has some effects on a company’s ability to retain staff there are other factors. Some employees are jumping ship because their needs are not being met. The lack of challenging and stimulating work, fair pay, the tools and resources needed to do their jobs, recognition for work well done and involvement in the decisions that impact their day to day lives at
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