Retaining employees has always been top-of-mind for companies and HR leaders. Employee turnover is costly. One study by Gallup found that it can cost a business 2X the annual salary of an employee who leaves (this is after factoring in costs for recruiting and training). Moreover, employees who want to quit are more disengaged, leading to a decrease in productivity.
In this article, we list some of the common reasons why employees leave their jobs and some tips to help retain employees.
Competitive compensation is an important component in retaining employees. This is particularly true with high performing employees who have much faster-growing compensation opportunities. Companies should check market compensation rates against its internal compensation rates at least bi-annually. Deferred compensation like using stock options or deferred profit-sharing can also be strategies to offer employees if an organization is budget-strapped.
2) Feedback and recognition
Feedback and recognition are key drivers for retention (they are also cost-effective retaining strategies)! 63% of employees who are recognized are very unlikely to look for a new job. Another study found that 65% of employees want more feedback, and 24% of workers would consider leaving their jobs if they have managers that provide inadequate performance feedback.
Creating a culture of feedback and continuous learning should be priority for organizations. Having a robust performance management solution that allows for continuous feedback and recognition can help develop and sustain a culture of feedback. If an organization is composed of employees who work on multiple different projects on multiple different teams throughout the year, enabling multi-rater feedback (360-degree feedback) should be considered as it helps reduce feedback/review biases.
3) Goal alignment
“The trouble with not having a goal is that you can spend your life running up and down the field and never score.”
Majority of us don’t want to run up and down the soccer field for no reason. This is the same with objectives. Employees need to clearly understand their goals and the expectations in achieving these goals.
To that end, objectives/goals should be SMART (specific, measurable, achievable, relevant, and time-based). It is also important that managers communicate how individuals goals contribute to overall organization strategy. This helps motivate employees as they can understand how their individual contribution is helping achieve overarching goals. OKRS and KPIs are popular goal setting frameworks that many organizations use to create goal alignment.
4) Career development
Clear career pathing is a priority for the younger generation of employees. One study reported that offering career training and development could help keep up to 86% of younger workers from leaving their current position. Moreover, it is an important consideration for recruiting and hiring. A recent survey found that career development matters most to younger workers in accepting a job offer.
Training and developmental opportunities should be addressed in 1-on-1 check-ins with managers. Managers should make it routine to ask employees what they want to learn and improve. Mentoring and coaching are also great options that can elevate the skill profile and experience of workers.
People quit their boss, not their job.
65% of employees say they’d take a new boss over a pay raise, and 3 out of 4 employees have stated that their boss is the most stressful part of their job. In fact, 60% of employees are more likely to suffer a heart attack if they had a manager that they considered incompetent, inconsiderate, secretive, and uncommunicative!
Having good managers isn’t enough, managers need to be great to retain the modern workforce. Continuous, 360 feedback can help develop and train managers. In fact, 85% of Fortune 500 companies use the 360 feedback process as a cornerstone of their overall leadership development process.
6) Workplace flexibility
Over the last two decades, evolving business strategies, organization structures, and technologies have made remote work easier and, sometimes, necessary. Moreover, in many sectors, remote work and flexible working programs have become an important factor in attracting and retaining employees. Many organizations are redesigning their office space to accommodate employees wants when it comes to where they want to work. If you want to retain your top talent, understanding your employees’ working preferences is imperative in this modern workday.
It’s time to put employees first. Up to 40% of the workforce is thinking about quitting their job in the short term. For organizations that are not putting their employees first, they better be ready: the big shift is coming.