Why does employee retention matter?
Your best employees could be the most likely to leave
1. Over 50% of organizations globally have difficulty retaining their most valued employees.– Willis Towers Watson
There can be a misconception that only low performers or “job-hoppers” will leave your organization frequently, but staff can have many reasons for leaving, and sometimes your best people could be just as likely to jump ship, especially as they are the most likely to be approached by another firm. It is critical to have systems to identify your high performers and to monitoring how they are progressing in their roles….
2. More than one-quarter of employees can be classed as high-retention-risk, and many of these are top performers or possess critical skills. 70% of them said they left to advance their careers.– Willis Towers Watson
Why is this the case? High performers don’t want to stagnate in their role, so if there is no room to grow, or things aren’t moving fast enough, they will often choose to move on to a higher position in a new organization if that is the only way up.
You can help avoid this by engaging in continuous feedback and using an automated check-in email to proactively ask every employee what development opportunities they would like to undertake.
Continuous feedback can also reveal common employee concerns like, needing more information about the company direction, bullying, unrealistic workloads or a toxic environment so these can be alleviated before it’s too late.
Unnecessary turnover is expensive
3. The total cost of losing an employee can be up to 1.5 – 2 times their annual salary.– Josh Bersin
Of course, some attrition is natural and even beneficial, especially in terms of moving on consistently low performing staff or rogue employees.
But as we discovered above, sometimes it’s your high performers or highly-skilled staff that are even more likely to leave, and these highly-trained individuals can be very costly to replace whether you bring in someone at the same level or hire someone less experience but pay to develop them over time.
Ensuring development opportunities are always on the table, and roles can be malleable to grow with an employee as their skills progress, can help reduce the risk of your highly-trained workers leaving.
See the true cost of attrition in your organization with our Employee Turnover Cost Calculator.
What causes high attrition?
Hint: It’s not just low salaries
4. 71% of employees would accept a pay cut, just to get a better job.- Hays
In many cases, money really can’t buy happiness at work. So while paying employees adequately for their experience and level of responsibility is still a must, it’s important to also pay careful attention to other areas. Let’s explore some other common attrition reasons.
Lack of flexibility
Flexible jobs are in increasing demand with many workers claiming that they would seek out a new job to get more flexibility in their time, while having more flexibility in their current role would encourage them to stay.
5. 62% of millennials are willing to quit their job in the next two years and work in the gig economy.- Deloitte
6. 37% of employees would quit and take a new job that allowed them to work remotely part of the time.- Gallup
7. 82% of employees would be more loyal if they had more flexible jobs.- FlexJobs
It is worth considering – aside from work that needs to be completed in shifts, is it really necessary for your staff to be present 9-5 or do their work while physically present in the office? If they can work different hours or work remotely and still get the job done (and well) why not allow greater flexibility?
8. Companies that support remote work have 25% lower employee turnover rates than those that don’t.- Owl Labs
Lack of recognition
A little effort in helping your people feel valued through recognition and opportunity can go a long way.
9. Employees who do not receive adequate recognition are twice as likely to quit within the next year.- Gallup
10. 76% of millennial employees would quit their job if they didn’t feel valued- Forbes
Reward and recognition strategies can help employees feel more valued at work, but it’s important to distinguish between the two. Different forms of reward (bonuses or perks) or recognition (awards, acknowledgement) can be more valuable to different people.
For example, some staff may want to be congratulated for their efforts in front of the whole company, while others would rather a one-on-one thank you from their manager.
Likewise, public recognition may mean more for some staff than receiving a bonus in private. It’s important for managers to get a feel for what strategies work best for their team members and tailor reward or recognition accordingly.
11. Employees who feel they get to use the best strengths and abilities and work are 15% less likely to quit their job.- Gallup
Focusing on what your team can do best for you just makes sense. Tailoring job roles is another great tactic that can serve as recognition.
By learning what elements of a job people are best at, and offering tailoring their roles to work to their strengths where possible, we can increase engagement and performance, and provide recognition in one hit.
Lack of engagement
We know engagement is important for improving performance and increasing morale, but disengagement is also a key contributor to attrition. Engaged employees are naturally less likely to seek out alternative employment as they are largely satisfied in their role.
12. Engaged employees are 59% less likely to seek out a new job or career in the next 12 months.- Gallup
13. Organizations with poor onboarding programs have double the chances of experiencing employee turnover.- Digittate
Engagement starts from day one with a great onboarding process. By engaging new starters from day one and ensuring they have goals to work toward, the resources they need to contribute, and a warm welcome from their peers – we can pave the way for a long and happy tenure.
Hiring the wrong talent
Attracting and hiring the best talent for your organization will result in better retention rates, this of course only occurs if flexibility, recognition and engagement are also prioritized.
14. When companies hire from the top 20% of their talent pool, they will have 41% less absenteeism, 17% higher productivity, 21% higher profitability, and 59% less turnover.– Gallup
But in order to achieve this, workplaces need to maintain a great reputation in the market. The best talent has their pick of organizations to work for, and will choose somewhere they know is a great place to work. For this reason, focusing on aspects like employee experience and retention can provide even more value than just improved performance or profitability.
15. 71% of workers use referrals from current employees to learn about an organization.- Gallup
Shifting priorities in the workforce
16. 21% of Millennials say they’ve changed jobs in the past 12 months.- Gallup
17. 60% of Millennials say they’re open to new job opportunities.- Gallup
18. Only half of Millennials think they will still be working at their current company one year from now.- Gallup
Attrition rates are on the rise as younger generations move through the ranks. So fostering a great work environment through all of the tips above will only become more critical in the ensuing years. Now is the time to get these things in check, if you haven’t already. Focusing on areas like learning and development along with broadening career paths early will help retain key staff members.
Ultimately, all of these factors form part of the employee experience, and by paying attention to this, we can improve employee retention over time.