With employee retention rates at all-time lows, it's important that employers understand their return on employee (ROE). Liza Bennigson, Business Segment Director at KonnectAgain, and writer for Recruiter.com advises that, five years or less on a job is the new normal, until you factor millennials who are on board for just under three years.
From positive culture to special perks, employers are doing all they can to maintain quality employees, but at what cost? Josh Bersin, Principal and Founder of Bersin by Deloitte, advises that, "Many studies show that the total cost of losing an employee can range from tens of thousands of dollars to 1.5-2x [the employee's] annual salary."
Understanding the ROE is a concept that comes from the idea that despite employees leaving at high rates, maintaining a relationship with them makes sense as they can be perfect sources for rehiring, referrals, and brand building —– providing value long after the office farewell party.
Large companies that provide above-average perks, like Facebook, Google, and Amazon all struggle with employee retention rates averaging a year. It seems to be the norm for many workplaces. Tapping into the power of the return on investment concept can ensure employers don't lose their investment the minute the employee walks out the door
ROE means building talent pipelines that last a lifetime, rather than a short period of time between interviews and terminations. Says, George Bradt, contributor for Forbes, "Organizations must now deal with the society of 'free-agent' employees they've created."