High client and employee retention rates are key indicators your business is set up for success. But how exactly do you retain clients and employees at a high rate? In short, having the proper systems and applications ensures your employees stay productive, and your clients stay loyal.
Let’s examine how successful businesses ensure employees love their work and keep their clients engaged.
Why Think About Retention?
High client and employee retention mean a business keeps its clients and employees long-term. Law practices succeed when both clients and employees are satisfied with the work product and the culture and environment of the practice.
While there are various genuine reasons why an employee may leave a workplace and move on to the next big thing, a business with high employee retention rates generally reflects positively on its workplace culture. Research suggests that having a high retention percentage directly correlates with business success (we’ll discuss calculating your employee retention rate below). This is because retaining employees long-term makes it easier to set business goals.
The same is true for client retention – when a business keeps clients at a high rate, they are more likely to achieve high success rates. Your client retention percentage reflects the clients who have left and those who remain. Calculating this percentage will help you better understand what is essential to your clients. It will also help you identify where your business may need to improve.
Integrating your client and employee retention rates into your business practice ensure your practice is set up for success.
How to Calculate Retention Rates
To calculate your employee and client retention rates, you’ll need two pieces of data for each:
- Clients and employees at the start of period X
- Clients and employees at the end of that period
To calculate your percentage, divide the number of remaining employees during period X by the number of employees you began with during period X and multiply by 100.
For example, if you began period X with 50 employees and finished period X with 40 employees, your equation would look like this:
- (40/50) x 100 = 80
- Your retention percentage would then be 80%
- Note: the same process applies to both employees and clients
- Note No. 2: include only existing starting and remaining clients/employees at the beginning and end of the period (do not include replacements or new clients in your calculations)
- Note No. 3: your employee and client turnover rate is the flipside of your percentage. So if your retention percentage is 80%, your turnover rate is 20% (to equal 100%).
Generally, 90% or higher percentages are considered good – meaning the business has an average turnover rate of 10% or less. On average, retention rates sat at 47.2% in 2022, but this varies depending on the type of work involved.
Tips for Increasing Employee Retention
Appropriate Hiring Practices
Employee retention begins at recruitment. For example, your hiring process may be too long and drawn out or need to be revised to determine whether potential candidates have the right skills.
You can consider implementing recruitment software to help you do the job. The three categories of recruitment software include applicant tracking systems (ATS), candidate relationship management (CRM) systems, and interviewing tools.
Ensure Effective Communication
Communication is crucial to employee retention. When employees feel comfortable communicating in the workplace, they’re more likely to know what is expected of them and ask questions if they’re confused.
Providing employees with a communication portal enables an open and transparent workplace. Applications such as Zoom, Microsoft Teams, and Slack are easily accessible collaboration platforms businesses use to improve communications.
Many employees appreciate having a preferred place or mode of work – whether at the physical workplace, home, or a hybrid. With the recent increase in work-from-home arrangements and collaborative software, this may be a viable option for your business. Employees have many different interests and needs, so having the opportunity to choose where they work can be a good business retention strategy.
Tips for Increasing Client Retention
Improve Client Support
Communication, communication, communication. Having effective systems in place to enable communication with your clients will ensure you have the right level of support. For example, incorporate a live chat or help desk tool on your website to ensure your clients are heard.
Shared Visions and Goals
Take the time to discover your clients’ visions and goals. Then, determine what they are trying to achieve and how your practice can help them.
Analyze Client Data
Having tools to analyze client behavior is critical in finding out why clients have stayed and why clients have left. This will allow you to shape your business to meet your client’s needs.
The Bottom Line
Employees and clients are at the heart of any business – keeping both happy can ensure your business will flourish.
In short, higher client and employee retention rates = higher rates of business success.