The need for effective employee retention strategies has been put into sharp focus following ‘The Great Resignation’. Since the pandemic has changed the world of work and allowed employees the time to reassess what working means, it has become harder for organisations to keep hold of their talent.
Having some level of staff turnover is good for an organisation – it brings in fresh ideas, new skills, and can support a diverse workforce. The issue that organisations face is that employee retention rates are getting lower and people are leaving roles faster.
Work Institute’s 2020 Retention Report found that 37.9% of interviewees left their organisation within the first year. Similarly, Personio’s 2021 Counting the Cost study found that 38% of respondents planned to quit their job within the next six to twelve months.
When employees leave quickly into their roles then organisations rarely recoup the costs involved in hiring them – and have to spend on another recruitment process. Gallup estimates that the cost to replace an employee can range from half of their salary to two times their salary.
As well as the financial cost of low employee retention, there are also losses in the continuity of work, productivity, staff morale, and even customer trust if they are noticing that their touch points within the organisation keep changing.
In order to understand how to improve employee retention strategies, it is helpful to analyse the reasons why staff leave organisations. A 2022 global survey by McKinsey ranked the top reasons for quitting:
Many of these factors are things which organisations have direct control over. Therefore, an effective employee retention strategy must take proactive steps to address the frictions and unmet needs that lead to employee attrition.
There is no checklist of ‘easy hacks’ that an organisation can roll out in order to keep people. Instead, companies need to be intentional about creating a culture of care for their staff. When employees consistently receive the message that they matter, the work they do matters and that they are valued this increases employee retention.
What this looks like in practice:
Any employee retention strategy needs to address people’s rising concerns about pay. As the cost of living rises, ensure that pay increases and expense allowances are in line with (or even above) inflation.
Studies have shown that the skills that make up emotional intelligence can be taught and that EI training improves team performance (Jordan, 2002). Increasing the levels of emotional intellect across all levels of your organisation can support employee retention because of the knock-on effects on relationships and culture:
Having emotionally intelligent leaders and managers means:
Having an emotionally intelligent staff means:
EY’s 2021 Work Reimagined Employee Survey found that 54% of employees would consider quitting their job if they weren’t offered the flexibility to choose when and where they work. It is vital that every employee retention strategy addresses flexibility by:
Burnout, an unhealthy workload, and lack of time for self-care all slowly exasperate the employee retention problem. Improving staff wellbeing is not as easy as popping on a few yoga classes to tick a box. Creating a culture of positive health and care means:
Celebrate employees’ contributions to the organisation. Employee retention will be higher when staff are regularly thanked, recognised, and perhaps even rewarded with financial bonuses, leisure time, or extra opportunities. Taking the time to value people contributes to their sense of meaning in the work they do and their belonging to the organisation.
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