If you’re familiar with the world of employee management, you likely already know that retaining employees is a difficult, yet critical, puzzle to solve. For any company, gathering the key pieces to keep employees fulfilled, engaged, and loyal is an ongoing challenge worthy of serious consideration.
At a)plan coaching, among the most important goals for all of our clients is to improve employee retention. Founders, CEOs, and managers engage with us because coaching is one of the most impactful ways to do so.
That is, coaching is a silver bullet solution for retaining employees like never before.
We’re fortunate to have been around long enough to know that this is true. Our clients track retention rates during and after our engagements, and the feedback speaks for itself. In this post, we dive into the current state of employee retention and why coaching is a direct route to better retaining employees.
Retaining Employees Is More Important than Ever
The story starts with today’s hiring landscape. Attracting amazing talent has become increasingly difficult for a couple of reasons. First, there is simply a shortage of excellent talent. And second, just as importantly, great talent tends to get gobbled up by the tech behemoths and Fortune 500s.
This is not to say that landing great talent is impossible, because that’s not the case. Rockstar employees are out there… but it takes a lot of time, energy, and resources to land them.
And that’s why retention has become so important. Companies must invest so much into finding the diamonds in the rough. Failing to retain the folks you worked so hard to find is a crippling pitfall for any company.
Ongoing Trend: Employee Retention Continues to Slip
The numbers don’t lie. Employee retention is a real problem, and it’s a challenge almost everywhere you look.
In 2019, more than 42 million US workers voluntarily left their jobs.
Forty-two million is more than a quarter of the US workforce, according to the Work Institute’s 2020 Retention report. According to the same report, this represents an 8.3% increase from the year prior, continuing a decade-long upward trend.
77% of new hires are open to new opportunities during their first year of employment.
The truth hurts! Remember all those resources you spent finding best-in-class employees? Unfortunately, many of them remain open to other jobs and other companies, according to Emplify’s 2020 Employee Turnover report. It takes a little while to build trust and loyalty. All the more reason to offer a key retention perk, like coaching, from day one.
27% of hiring decision makers in Canada note turnover as a top challenge… even during COVID-19.
Not even the global pandemic slowed the trend, according to a poll commissioned by Express Employment Professionals. Great employees are a company’s greatest asset. Retention solutions are in dire need, and demand for them continues to rise.
Statistics Show Why Retaining Employees Is a Problem Worth Solving
Let’s connect some of the dots on how better retention drastically improves your bottom line.
The cost to replace a fully-trained employee can exceed 200% of that employee’s annual earnings.
This, according to a study from The Center for American Progress. It’s easy to see how turnover costs can stack up quickly, especially for an organization failing to retain higher-level employees in the 6-figure range.
Companies with highly engaged employees are 21% more profitable.
Engaged employees stick around. And not only does engagement improve retention, it directly impacts your bottom line, according to this Gallop study. For many companies, coaching is used as a tool to increase employee engagement – and it works.
What Is the Value of Coaching as It Relates to Retention?
What is the true value of coaching as it relates to retention? Let’s consider a mini-case study to break down some of the numbers. Here are just a few details on an example organization:
- Enterprise organization
- Entry-mid level employees averaging $50k salary
- Director-level employees averaging $150k
- Coaching being used at the Director level
If coaching leads to improved management behavior at the Director level, which leads to the retainment of one entry-level employee making $50k, this would yield up to $100k in savings (Remember: the cost to replace a fully-trained employee can exceed 200% of that employee’s annual earnings).
Conservatively, let’s chalk just 10% of that savings to the Director’s coaching… $10k.
Also consider that the Director him/herself may be retained due to their adoption of a coaching plan. Retaining an employee making $150k could equate to $300k in savings.
Again, if we only attribute 10% of those savings to coaching, that’s another $30k.
Add it up, and we (very conservatively) estimate that in this example, coaching leads to $40k in savings. And that’s only accounting for 2 cases of mitigated turnover! In most cases, this $40k would represent a 5-10x return on the cost of the coaching itself.
And don’t just hear it from us. a)plan clients have a track record of improving retention rates during our engagements.
“As an organization, we have retained a lot of valuable talent because of a)plan’s coaching allowing folks to not only understand what may be important for their career trajectories, but also who they are holistically as people and how they want to improve and goal set – and how those interplay with each other.”Michael Mosby, COO at Tides
Final Thoughts on Retaining Employees and Coaching
There’s a reason more than 50% of companies struggle to retain highly valued employees. Here are some of the most common challenges our clients face before working with a)plan:
- Unfulfilled and unengaged employees
- Employees feeling stagnant in their roles
- Positions that lack purpose
- Not enough work-life balance
- Weak or no cultural values
- Weak or no DEIB program
Fortunately, a solution like a)plan is designed to address every single one of these challenges. By working with employees to set both personal and professional goals, a)plan’s coaching method has led to the following results among users:
- 94% identified important goals and increased fulfillment
- 71% achieved significant progress toward goals
- 76% increased motivation by tracking progress toward goals
- 57% improved their moods by keeping a gratitude list in the a)plan app
These are tangible, proven results. Coaching is a vehicle to more engaged and fulfilled employees, which leads to improved retention. Considering the massive impacts that engagement and retention have on a business, it’s no wonder why coaching is transforming organizations – both culturally and fiscally!