A study conducted by Employee Benefits News stated that the average cost of losing an employee amounts to 33% of their annual salary. This means that as an employer, you don’t only lose talent or time – but also valuable funding that you could have allocated to other investment projects or resources.
According to LinkedIn, the issue of employee retention is predominantly due to a workforce that is more responsive to the needs of the market. To-date, 87% of professionals are open to discussing new opportunities with a recruiter – of which the highest percentage consists of people aged between 18 and 34, i.e. the millennials.
Research has further shown that millennials express less corporate loyalty in comparison to prior generations with 60% of millennials having changed jobs at least once in the last five years. With millennials expected to make up more than 50% of the workforce by 2020, it is therefore of pivotal importance for employers to look at ways to retain them.
What can be done to improve employee retention?
Whilst we can’t control all the reasons that prompt people to leave their current role, organisations can look at the following retention strategies to increase employee retention:
- Let your employees know their worth
More often than not, one tends to point out the other’s mistakes and fail to recognise efforts and achievement when they are due. As a result, the employee becomes demotivated and disengaged as they feel that their hard work is not recognised. Showing people how their work matters can make a huge difference. This specifically resonates with millennials who look for purpose in their job. In this instance, we will advise that you communicate constructive and positive feedback to your employees and indicate how they contribute to the overall business strategy.
- Let your employees work flexibly
Flexibility is an element that is largely valued by millennials. The Millennial Majority Workforce Study reported that 66% of millennials value flexible working hours and 56% value the possibility of working from home or remotely. Research has also shown that flexible workers are more engaged and more productive when they are able to work in an environment that is favourable for them to produce quality work. If you trust your employees’ work ethic and ability to perform, then why not let them take ownership of their role and work flexibly too?
- Provide employees with clear career paths
A key contributor to high turnover is employees’ perception that there is a lack of career opportunities and advancement in the company. While this can be true to a certain extent, in many cases it’s simply because the manager has not provided enough information on possible career paths to their employees. As a result, employees become complacent and feel that their career is stagnating. To reignite their employees’ engagement levels, managers can either offer training and development opportunities or change up their responsibilities so their work does not become too repetitive. Managers can also assist in their career development by organising a catch-up every quarter to touch base on their progress and career trajectory.
- Open to having difficult conversations with your team
Even if the issue at hand cannot be immediately resolved, research has shown that employees appreciate when their manager takes the time to hear their concern on any work-related issues they’ve encountered. This can be anything from conflict at work, salary expectations or challenges in balancing work and life duties. When a manager is open to hearing out their employees and work together to find a resolution, employees feel heard and a stronger part of the team. Likewise, managers should raise any problems with employees sooner rather than later. Avoiding difficult conversations such as performance issues can affect the workplace and productivity in the long run. It is therefore crucial to be able to have an honest discussion with your team to understand and tackle any underlying issues.
- Build your brand around a strong culture
According to Deloitte, 94% of executives and 88% of employees believe a distinct workplace culture is important to achieve business success. Without a defined corporate culture in place, employees loses their sense of self as they are unable to relate to the company’s values and principles. To circumvent this, make sure that all staff – both old and new, are aware of the organisation’s values and are given examples on how to demonstrate such values. More importantly, ensure that your employees feel like it’s an inclusive environment.
What are the current retention trends in Australia?
According to the turnover and retention research report released by the Australian HR Institute (AHRI), below are some of the observed trends:
- 73% reveal that they have implemented training and development opportunities as a means to retain employees
- Employee exit interviews remain a key indicative tool for retention trends as companies collect data on turnover through employee climate surveys and performance appraisals
- 65% of employees have indicated that a flexible work arrangement is very important to accommodate their lifestyle and is therefore a determining retention factor
- 51% of respondents have acknowledged a positive workplace culture
- 48% have named workplace health and well-being activities as pull factors that will encourage them to stay with their current employer
However, it is essential that organisations have an effective leadership team that is able to deliver the companies’ vision and permeate the company’s values across their respective teams. This is further substantiated by the research undertaken by AHRI, which reported that an effective management team stands out as the most important factor for employee retention.
Do you have difficulties retaining your employees?
Employee retention should be an active component of your company’s strategy and the focus should both be on the company’s performance and the well-being of its people.
If you are an organisation looking to share your experience on retaining top talent or simply looking to learn more about current retention trends, please don’t hesitate to contact us on 0292 851 064 for a confidential discussion. We will be able to advise on the retention strategies your organisation can undertake.