How and Why Employee Retention is So Important

Employee Retention

An organization’s employee retention rate is directly indicative of their internal work environment and culture. A high rate of retention means that employees are not just comfortable in their work environment, but they also see long term growth opportunities within the company. Let’s get to know why that is more important to employers than a lot of them realize.

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Reputation is everything in business, especially if the company wishes to be there for the long game. Now, there are multiple factors that can affect a company’s reputation which includes, but is not limited to, customer satisfaction, vendor and partner relations, product and/or service quality, public relations, and employee satisfaction.

Any company with a high turnover rate (people who leave or are let go within a given time-period) will automatically gain a bad reputation within the job market. They will find it increasingly difficult to recruit talented and experienced professionals. Instead of them seeking jobs at your organization, you will have to go after them with higher-than-expected packages and benefits.


Modern business needs talented, educated, and trained professionals at the very least, but field experience is what really turns it all into functional skill. Every time your company loses an experienced and skilled worker who knew the ins and outs of the job they were doing, it’s an immediate and long-term loss with long-term consequences. Depending on how crucial and effective they were, it could impact productivity quite severely. The losses in such instances can be summarized along the following lines:

  • Immediate losses in productivity suffered on account of losing a key worker.
  • Loss in productivity suffered until a new replacement can be found, trained, and accustomed to fit the vacancy.
  • Expenses necessary to train the newly recruited replacement.

As we can see here, it’s not a good position to be in from the management’s perspective. According to multiple studies, workplace dissatisfaction is the leading cause behind high employee turnover rates. Mitigate such losses and improve your company’s employee retention rate by focusing on their mental wellbeing. 


More often than not, an ex-employee will join a rival business, which is seldom good news bad for their ex-employers. If the worker in question used to hold an important position and had access to critical inside information about clients, connections, vendors, customers, etc., rest assured that the ex-employee will now be using their knowledge to bring in business for their new company. In fact, it is even possible that the ex-employer will lose some of their clients.

In summary, it would be accurate to state that losing key employees at a high rate is bad for business. It will inevitably put additional pressure on the employer’s resources, finances, and possibly even revenue sources. Having said that, it must also be acknowledged that everyone working for a business is not a key employee. In fact, some of them can even be counterproductive to keep. Therefore, it is always important to identify who your key employees are, why you consider them to be so important, and what you can do to retain them.

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BSV Staff

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