Recent reports on the state of the U.S. economy are encouraging – with a strong January 2024 jobs report from the Bureau of Labor Statistics, record stock market numbers, and declining interest rates. As a result, businesses and consumers are starting to feel a bit more optimistic.
 
But after a number of difficult years, in large part due to Covid, supply chain issues, and the rising interest rates that followed, some small to mid-sized business owners are not as quick to go back to business (growth) as usual. Due to remaining fear of what may be on the horizon – however small the chance of economic decline may be – it’s possible companies will continue to take a more conservative approach to hiring.
 
This slow approach to hiring, however, can result in current employees being overstressed and burned out – especially those who are already feeling the burden of additional job duties. That’s why one of the most important HR strategies for businesses to consider in 2024 is a renewed focus on employee retention.
 
Due to a tight labor market in 2023, retention efforts gained ground as open positions became more difficult to fill. A strong retention strategy, however, can (and should) be an ongoing initiative for organizations during good and challenging times, alike. Why? It pays off.
 
In Slack’s report, The State of Work in 2023, a survey conducted showed that “82% of employees surveyed say that feeling happy and engaged at work is a key driver of their productivity.”
 
In addition to increased employee productivity, a focus on employee engagement and satisfaction has a direct correlation with employee retention. Losing employees, especially in a lean organization, can have a significant impact on your bottom line. And replacing employees is not just costly – you also lose the institutional knowledge departing team members take with them.
 
Eleesha Martin, G&A Partners’ director of Recruitment Process Outsourcing, states that the cost of replacing an employee ranges between one-half to two times the employee’s annual salary.
 
Ultimately, stronger retention leads to happier employees, which equates to a better bottom line through:
 

• Lower employee turnover rates, which saves management time and money.
• Increased productivity, as happy employees are 12% more productive than unhappy employees, according to the Social Market Foundation.
• Better customer service, as happy employees tend to provide customers with a better experience.
• Fewer sick days or breaks during the workday.
• A workplace culture focused on employee satisfaction.