Retaining talent: keeping what you already have.

• Author: Cummings, Judith
• Position: HUMAN RESOURCES

The American Management Association (AMA) claims that it costs an employer an average one-third of an average employee's annual salary and benefits to replace the employee. So your average employee, with average productivity, making $36,000 per year, will cost you $12,000.

Look around your office or work location at your most important resources--the people. Who is absolutely vital to your operations? Who is a key player in your most important project? Who is indispensable for day-to-day success? Who has the skills you cannot succeed without?

Now ask yourself--how sure are you that these people will still be here in six months? The success of your business in the next year may depend on retaining those individuals as engaged employees.

IT COSTS MONEY TO REPLACE TALENT

Talent retention is integral to your continued success whether you are a manufacturer, an engineering company, or a call-center operation. You need to keep and develop the talent you have or expend important resources trying to replace it. The American Management Association (AMA) claims that it costs an employer an average one-third of an average employee's annual salary and benefits to replace the employee. So your average employee, with average productivity, making $36,000 per year, will cost you $12,000 to replace according to the AMA.

Imagine how much more it would cost in lost productivity, recruiting, screening, training and other expenses to replace your above-average employees. The cost of replacing an employee with 10 years of sales experience in your industry will likely cost well over half of his or her $90,000 and may put key customer relationships at risk. The more you depend on an employee, the higher the cost of replacement. For some top talent it may not be possible to replace him or her, no matter what you are willing to invest.

PUT AN END TO TURNOVER

There are several ways employers can take action to address talent drain. The process is deceptively simple--understand who is at risk, why they are at risk and then act to reduce the risk. Simply, you first need to know why people leave and then try to change the factors that lead to turnover. The earlier you know what needs fixing, the easier it is to fix. Done right, you also save money by targeting your efforts on what really makes a difference.

There are many things that can influence retention. Some external influences on retention such as regional labor market or competition may be true for all your...