HomeTalentWhy focusing on employee retention can help you retain customers

Why focusing on employee retention can help you retain customers

  • 5 Min Read

HRD Thought Leader Janine Dennis explores the inherent connection between employee retention and customer retention, and why the importance of this has been amplified by 2020’s corporate nadir.

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30-second summary:

  • Retention is one of the key areas in HR, particularly due to this year’s disruption
  • In many ways, employees are also customers; it pays to treat them that way
  • Customers often develop bonds with employees, making retention even more influential for the customer experience
  • Ethical and moral practices are key to retaining both employees and customers

Employee retention is consistently a hot topic in the HR space. Every year, organizations scramble to assess the market and their internal processes for potential barriers to retaining their best people. The other side of the retention narrative is that, as HR practitioners, we can often be somewhat over-confident in our ability to continuously hire great people following a bout of turnover. We hope and assume that there will be an even better prospect around the corner.

However, numerous studies have suggested that this is not always the case. As stated in a Deloitte study from earlier this year: “Companies seeking to thrive, given today’s competition for talent, cannot give way to complacency in the face of seemingly high retention numbers. Nor can they neglect their talent and retention strategies out of a false sense of security that employees have fewer options in a tight job market.”

Employee retention is a paradox. As we continue to navigate these uncharted waters of the global pandemic, the variables that contribute to retaining great people are increasing by the day. What’s more, there is something to be said for how high turnover and attrition begins to erode the foundation upon which meaningful customer relationships are built. And in this day and age, we know all too well that a poor customer or employee experience can fast become public knowledge via social media. There is an emotional proximity customers have to every aspect of your business, such that any public evidence of abuse, mistreatment, discrimination or any unfair practices within your organization now becomes the reason why people will stop spending their hard-earned dollars with you.

Here are some considerations to focus on as we continue to foster better employee experiences and relations alongside customer retention:

Your employees are your customers

Just recently, I mentioned to a family member that I was going to Whole Foods. They scoffed, let out an expletive and said “I can’t stand them”. This person worked for Whole Foods for almost a year, and had been a casualty of poor leadership and bullying. Not only did he spend money purchasing Whole Foods goods during his employment period, but he would often spread the word and speak highly of the organization.

That is not only free and unsolicited marketing, but also business that has been lost because his employment and exit were mishandled. While we can simply say that this is just one person and that it is unlikely to have an impact on the company’s bottom-line, it is the cumulative effect of him sharing his experiences with others that ends up damaging the brand. The employee and customer are not always right, but their collective impact on your business can be far-reaching, and potentially destructive should you choose to neglect those relationships.

Employee-customer relationships are real and resilient

Making a purchasing decision can be challenging, but what often takes the difficulty out of those decisions is working with a competent, empathetic, and helpful representative of the company. Depending on the level of interface between customers and employees, there is a bond that gets created when the customer finds your employees helpful and relatable. When that person leaves your company either abruptly or with notice, it is not only a loss for you in productivity, but a loss for the customer who had an ally on the inside.

Conversely, how you treat your customers can also become grounds for your employees to take their talents elsewhere. This occurs when there is dissonance between your mandate to serve the customer, and how the employee would prefer to be of service. You can’t retain them all, and your legal contracts can’t prevent customers from entertaining new providers if their point of contact has moved on. It is wise to ensure that employee and customer relations and separations alike are handled with care so as to lose as few fans of your brand as possible.

Ethical practices and retaining the right people matters more than ever

According to PWC’s Future of CX Report, “one in three customers will leave a brand they love after just one bad experience, while 92% would completely abandon a company after two or three negative interactions”. Neglecting to address high turnover is a costly business mistake, particularly when it impacts everything from employee morale to knowledge transfer to the continuity of business.

Negative interactions are sure to increase when the former focal points of business are impacted by high turnover rates. This puts the necessity of ethical and moral practices back in the forefront. Experiences are more and more the priority for businesses as they are the drivers of purchasing decisions, not the product or pricing itself. It’s a great time to adopt employee and customer-centric models that foster retention and expedient pivots to process and approach to improve experiences both internally and externally.

As we move into the next decade, it will become increasingly apparent how all aspects of business and life inform one another and equally blend together. This will require us to abandon the prevailing compartmentalized approach to supporting internal and external functions in exchange for engendering a more integrated strategy and process for retaining your company’s greatest assets.

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