Don't lose your MVPs to your competitors! Stay ahead of the crowd and make retaining talent a top priority for your business.
In the post-Covid era, the dynamics of employee attraction and retention have significantly changed.
Research by The Integrated Benefits Institute (IBI), a health and productivity research non-profit, showed that 61% of employers struggle with retention, and 73% have difficulties attracting employees.
Since high turnover is costly to businesses, it makes sense for organizations to start reconsidering their employee retention strategies.
But with so many factors in play - from organizational culture, to hiring policies and benefits packages, to employee management strategies - where should companies place their focus? Let's take a look.
The truth is that people do not leave their jobs for no reason – their decision is always affected by something.
And while sometimes it looks like a logical step to make (for example, when a person moves to a different place or wants to switch to a new career,) in most cases, it’s a sign that something went wrong.
The reasons for such a decision could be different – financial, personal, psychological, motivational, or even health-related. Or it could be a combination of any of these reasons.
Not to mention that dissatisfaction, boredom, frustration, or exhaustion can accumulate like a snowball, and eventually turn into a powerful avalanche of consequences.
So what exactly can make a person say goodbye to his or her employer?
The majority of us aren't just turning up to work for the pure love of it. As cynical as it sounds, to survive, let alone to have a good life, we need money. And when you see that the work you do doesn’t pay well enough, so you struggle with bills, you will not stay there for long – no matter how much you enjoy what you do.
But there is even more to it. What if your employer’s competitor is offering a better salary for the same job - a salary that seems like fairer compensation? Would you stay loyal to your company, or would you try your luck?
The answer seems pretty obvious, doesn’t it?
We still live in the paradigm of the grind culture, which tells us that if we want to be successful, we need to work longer hours, with more energy and enthusiasm - and prioritize our career by sacrificing other aspects of our lives.
This mindset, born in the 1990's and early 2000's with the rise of Silicon Valley titans and fueled by the development of social media, requires us to work… for the sake of work.
This ideology is losing its sparkle, though. Thanks to Covid-19 pandemic lockdowns, people started reevaluating their approach to work, preferring a healthy work-life balance to an exhausting rat race.
According to a survey conducted by insurance company Prudential, which involved 2,000 US workers, 70% of respondents said they prioritized, or were considering prioritizing, their personal lives over careers.
Naturally, when an employer requires you to work unreasonable hours, leading you down the path to burnout, you may want to reconsider what you do (or at least who you are working for).
It needs to be said that the necessity to work long hours can be the result of improper management - namely, poorly organized resource allocation which leads to the over-utilization of some employees, and underutilization of others. This mismanaged team workload can also be a cause of conflict.
Learn more about Resource Allocation ➡️
The environment in which you work has more influence on you than you think. Constant clashes with colleagues, misunderstandings about job responsibilities, gossip and intrigues – doesn't sound like the healthiest working environment, does it?
In his book “The Five Dysfunctions of a Team,” Patrick Lencioni describes 5 factors that damage the team culture:
Here we should also say that the role of a leader in building team culture cannot be diminished. A leader sets the tone for the team, being a role model and triggering certain behaviors.
A creative and empathetic leader teaches creativity and empathy, building a healthy team. A secretive leader teaches the team not to trust anyone. A good leader can retain talent, increasing employee satisfaction, and a bad leader creates a team of unhappy employees that will eventually leave.
Even the most exciting work will stop being enjoyable eventually if you just keep doing the same thing every day.
A lack of challenge means no growth, turning a job you initially liked into a boring routine. Without training and skill enhancement, people may lose interest. If an employer does not offer career development opportunities, this will eventually create a glass ceiling for the company workers, the employees will feel stagnation.
Feeling unrecognized at work is not any better. People are social creatures, and recognition is important for our well-being.
Recognizing employees once a year just for a ceremonial purpose does not count – people want to know they’re valuable and important all the time.
Read on: Key Employee Retention Statistics that Every Manager Should Know ➡️
Employee retention is inseparable from business growth. Skilled, professional workers set an organization up for success, ensuring high quality and timely delivery of products and services.
They can help develop a strategy and help the organization succeed even in difficult times. They can build a strong, elite organizational culture, which in turn creates a positive company reputation and, consequently, attracts more talent.
High employee turnover, on the contrary, can pose multiple risks for your company.
First of all, it’s expensive to replace talent – you will have to spend money on hiring new employees and providing training for them. Secondly, even one employee leaving can disrupt the workflow, forcing you to reassemble your resources in the middle of the work process.
Thirdly, isn’t it just discouraging to lose valuable employees - especially if those employees go and work for your competitor?
High turnover can be very bad for morale. When people see their colleagues leave, they might start thinking that this place is not good for them, either.
It can create a domino effect. After all, if the turnover is high, an organization can start to feel a bit like a sinking ship - and no one wants to be the last to flee a sinking ship.
With that said, it's clear that prioritizing employee retention is something companies should consider for their own well-being. So our next question is…
There are various ways to go about improving talent retention – so let’s enumerate the most useful and popular approaches:
Besides having necessary skills and qualifications, a candidate should fit the company culture. If employees share the company values and principles (determination, honesty, teamwork, accountability, inclusion etc.) they will work more productively, be more engaged, and feel motivated to stay.
To make sure you recruit the right people, at the interview, ask questions that would reveal candidates’ personality. Ask them what shaped them as the person they are now or what character traits helped them overcome personal and professional difficulties.
Ask them about their biggest achievement and how exactly they contributed to it, or about any important experience, positive or negative. This way, you can see a real picture of who’s in front of you.
Again, not only to learn about their skills. Pay attention to how long a person stayed at his or her previous job.
If you can track the tendency of the candidate to change jobs very often, it can be a red flag, signaling that perhaps this person gets bored easily and doesn't plan to stay in any one place too long. However, it can also suggest that they are ambitious and proactive about seeking new learning opportunities.
At the same time, if the candidate worked for a single company for years, through ups and downs, it can mean loyalty and perseverance - but it can also signal a risk-averse nature.
According to the Pew Research Center, 63% of workers who quit jobs in 2021 named a lack of opportunities for advancement as the reason. Without development, people may feel bored and unchallenged, and start looking for job alternatives.
By introducing various career development programs, companies invest in their long-term success: on the one hand, they demonstrate commitment to their employees’ future, which will increase loyalty and help retain talent, and on the other hand, they equip employees with skills that would help the business stay competitive.
Training sessions, online courses, workshops, or job shadowing – you can pick from a variety of different training options.
We should also say that besides focusing on employee development, it’s also important to train managers.
Very often, managers are people promoted to their positions thanks to their hard work and excellent technical skills. However, they do not necessarily know how to manage people - which is a whole separate skillset in itself! To be an effective manager, they might need training and coaching.
Competitive compensation is a critical factor in retaining talent. However, you should also encourage employees by rewarding them, as recognition and rewards can significantly improve employee engagement and morale.
It’s important to show appreciation regularly, face-to-face, and publicly, not just in a private conversation.
As for the rewards, they can be of two types – monetary and non-monetary, and it's best to use both of them. Monetary perks work, but it's not always possible to offer above-market-rate salaries due to budget constraints.
But, for some people, other types of rewards can be more appealing than monetary compensation. Flexible work arrangements or generous annual leave policies are also extremely valuable benefits.
Stay interviews are conversations between a leader and an employee that aim to discover what the employee values about his or her role at the company.
They can help you discover what truly motivates employees and whether they feel that their preferences are being considered, as well as uncovering any issues, and building trust between leadership and team members.
At a stay interview, employees may be asked about their aspirations, achievements, team morale, and many other things. The main advantage of stay interviews is that they show employees that the company cares about them, this way helping create a bond.
More and more people want to work in a flexible environment, so give them such an opportunity. Allow employees to work flexible hours or, if possible, in a hybrid (office and home) or even asynchronous environment. This will give them more freedom over their time, letting them work and solve personal issues at the same.
Don’t forget about leave policies. Paid time off (vacation and sick leaves) will let people recharge and give them a sense of security. Develop reasonable policies for administrative leaves (when people need to visit various government offices – for example, to change a passport) and family-related needs (like parental leave). This will also help avoid a poor work-life balance.
Also, do not send emails after work hours unless it’s absolutely necessary. People have the right to disconnect from work in their personal time!
For many leaders, it’s hard to “let go” – they want to be in control. However, while a top-down leadership style might work great for newly created teams, or for teams whose members are mostly inexperienced, it’s not the best option for teams consisting of professional specialists.
A tight grip on teamwork signals that a leader does not trust their team members, which is very discouraging. Besides, it doesn’t let people fully express themselves, stifling experimentation and innovation.
Since they are deeply involved in frontline work processes, your employees have a lot to say and offer. So give them autonomy and let them make some decisions. By taking more responsibility, people will develop a sense of ownership, and try to do their best.
Psychological safety refers to a feeling that work is a safe place – a place with a "no blame culture", where you can take risks and still remain protected.
No one will punish you for expressing an idea or making a suggestion. You will not be fired for reasonably criticizing an authority figure or pointing out their mistake. You can safely engage in a conflict and speak up. You can ask for support when you need it, and no one will make fun of you.
Psychological safety is about empathy. This is an environment where people try to imagine themselves in each others’ shoes and act from a position of understanding and respect. And this is where people truly show their full potential.
If we zoom out and consider everything we've discussed in this article, you'll notice that it basically comes down to creating a positive employee experience.
And this is what people-first culture is about – about putting employees over profit, about appreciating and recognizing them, and giving them opportunities to be the best versions of themselves.
You might have thoroughly planned an employee retention strategy, but without a culture that fosters an environment of respect, self-expression, safety, and security, your strategy may appear useful – after all, "culture eats strategy for breakfast", doesn’t it?
Fundamentally, the recipe for low turnover and high talent retention doesn't have to be complicated.
Start with people, and focus on people. Hire the right candidates. Let your employees know that they are valued - and reward them fairly. Help people learn and grow their strengths. And put in the work to develop and maintain an inclusive, positive work environment.
Get this right, and you'll start to have the opposite problem (which really is no problem at all 😉). Rather than losing talent, you'll have talented folks lining up round the block to come and work for you!
Want more tips on retaining talent? Check out our Guide to Employee Retention Strategies ➡️
