Employee Retention Efforts Can Reduce Turnover

Written by: PeopleKeep Team
Originally published on February 2, 2017. Last updated October 9, 2020.

Studies show that employee turnover can be one of the biggest costs for businesses. On average, businesses must spent the equivalent of six to nine months of an employee’s salary to locate and train their replacement. For a worker who earned $60,000 annually, this means a company must shell out up to $45,000 simply to get another person in the door—and that’s before the company has spent a dime on the new employee’s salary.

Considering the high cost of replacing and retraining, it makes sense for businesses to think about why employees leave in the first place—and to focus their efforts on employee retention rather than making counteroffers when employees threaten to move on.

Why Do Employees Leave?

According to employee retention researchers, the reasons employees decide to seek greener pastures aren’t always clear-cut.

In some cases, employees leave for traditional reasons, such as a bigger salary or advancement opportunities they aren’t getting at their current position.

However, sometimes employees are motivated to leave due to reasons that aren’t directly related to their satisfaction with their present job. For example, researchers have found that job hunting jumps by 6 percent around the time of the anniversary of the day employees joined the company.

Job searches also jump by 9 percent near position anniversaries and 12 percent around birthdays. Interestingly, the biggest spike—16 percent—in job hunts corresponds to non-work-related gatherings, such as school reunions, when people are more inclined to reexamine the state of their life goals.

Prevention vs. Counteroffers

Businesses want to keep great employees, and this often leads them to make a counteroffer in an effort to lure a worker into staying when they have received a job offer elsewhere.

However, data shows that focusing on preventing employees from looking for work elsewhere is likely to save businesses money in the long run. Washington-based insight and technology company CEB found that 50 percent of employees who accepted a counteroffer still left their job within 12 months.

Businesses that made concerted investments in employee retention fared better—and experienced less turnover—than those that focused on trying to recapture employees who attempted to leave. Offering benefits is an easy way to increase employee retention without having to resort to counteroffers.

For more information, see What are the Best Benefit Options for Employees?


Stability is important for any company—with constant turnover, resources are wasted on finding suitable replacements as well as retraining new hires. By investing in employee retention, you’re not just investing in keeping your employees happy—you’re investing in the ability of your company to continue to innovate without being burdened by the cost of employee churn.

Download our employee retention eBook to learn how to keep your most valued employees without breaking your budget.

How has focusing on preventing employee turnover helped your business? Let us know in the comments below.

Originally published on February 2, 2017. Last updated October 9, 2020.


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