The Advantages of Employee Retention

by Lisa Seber; Updated September 26, 2017

Employees are an organization's intellectual asset that is responsible for the day-to-day business operation. Although retaining competent employees in an organization generates goodwill in the work force, it also has a positive effect on the product or services a company offers. Employee retention is a financial gain for organizations.

Acquiring Talent

When organizations retain their employees, they avoid hiring costs. These are often hidden costs. The cost to post on job boards can be annual or a one-time expense. Agencies charge a percentage of an employee's annual wages. Larger companies may have staffing departments whose sole responsibility is screening and interviewing talent. Other companies may assign this task to department heads or other individuals in the organization. The time an individual spends screening and reviewing resumes takes him away from his main job responsibilities. The hiring process is risky. Background checks, personality testing and aptitude testing can predict a candidate's capability, but there is still a risk.

Training and Development

Retaining workers reduces training costs. Recruits need to be trained in business practices specific to the employer's software, culture and office practices. Training requires one or more current employees to take time away from their job responsibilities to educate the new employee on the organization’s way of doing business. Two or more people are on the company payroll producing the results of one person. In the first 90 days, a new hire costs the company money. When companies retain employees, training dollars can be used to further develop the work force. Long-term associates have the experience to review what has worked before and apply that knowledge to future situations.

Skilled Labor Force

Employment retention develops a strong staff. Working individually or in teams these individuals share knowledge and expertise. The future managers of an organization come from this work pool. These employees are the historians of an organization’s successes and challenges, and provide mentoring to new hires They are committed to the continued growth of the origination and its work force. These individuals have finessed the inner workings of an organization. As they continue to develop their skills, the organization benefits.

Impact on Customer Service

Employee retention has a positive impact on customer service. Turnover brings disruption in customer service, loss of business and possible negative business impacts. An organization’s customer base expects consistent and reliable service. There is a learning curve with new hires and thus the potential for error or poor communication with a client. This can impact business relationships. Long-term employees develop relationships with customers. They know the clients' preferences and can anticipate future needs. This knowledge develops over time.

About the Author

Lisa Seber began writing professionally in 2000. She specializes in writing about human resources, office operations and coordinating events. Seber earned her Bachelor of Arts in business administration at American InterContinental University, Los Angeles.