10 Key Strategies for Retaining Talented Employees
Few of the 4 million U.S. students who graduate each year either want or expect a job for life. In fact, the average American employee stays with a company for just over four years, according to Bureau of Labor statistics. Churn is the sign of a healthy employment landscape, but something bigger is afoot in the current job market. More than 19 million U.S. workers have quit since April 2021 as part of the “Great Resignation.”
For the most part, employers don’t know why they’re struggling to retain employees or how to stem the flow beyond crude employee retention strategies such as pay rises. The volatility shaping the employment landscape is about purpose, not pay. Today’s employee isn’t debating where to work, but why. Paradoxically, that’s an opportunity for employers to listen, learn and reassess how to retain employees.
What Is Employee Retention?
We’ve already explored how leadership can stimulate employee engagement, but that’s only possible if you’re able to keep employees on the payroll in the first place. Employee retention typically refers to the proportion of existing employees who remain with the company over a standard 12-month period. Sectors with the highest employee turnover include seasonal roles (lifeguards and ski instructors), retail, food service, cashiers and hospitality. These have drawn fierce criticism recently for offering minimum wage positions with little career advancement, ultimately leading employees to vote with their feet.
The Importance of Retaining Employees
Research by McKinsey at the height of the Great Resignation revealed that 40% of employees surveyed expected to quit their job in the next three months. Significantly, many were planning to resign without having lined up their next role. For the employee, it’s a brief moment of liberation before the reality of student loans and bills refocuses the mind, but for American businesses as a whole, $11 billion is lost every year due to employee turnover. The cost of hiring and training new employees adds up.
Why Do Good Employees Leave?
- Salary – Many employees find they can only unlock a pay rise by switching employers.
- Benefits – Health coverage, pensions and child care are powerful tools employers can use to attract talent from their rivals.
- Career advancement – Today’s fast-evolving digital landscape means that employees can quickly outgrow the skill set of their current business and will search for more challenging opportunities.
- Flexibility – Particularly since the pandemic, employers are looking for something more than a cubicle in a downtown office five days a week.
How To Retain Employees: 10 Strategies from Great Companies
What are companies such as Pfizer, Verizon and Procter & Gamble doing to set them apart from other Fortune 100 companies when it comes to tempering volatility and boosting employee retention? The most effective employee retention strategies excel in the following ten areas.
1. Onboarding and Exit Interviews
The best-valued employers have a clear, consistent process for onboarding new hires that is interactive and engaging, perhaps featuring self-service resources, for example. New arrivals are given transparent benchmarks for performance targets.
The exit interview isn’t a lost cause when it comes to retention, however. For the employer, there’s a huge learning opportunity to discover shortcomings within the company that a current employee wouldn’t be willing to share.
2. Set Mutual Goals
Employees don’t want to feel as if they’re simply filling a vacancy. They want a road map, marked with SMART goals, that gives them momentum. Too many employers focus on what they need from a new employee, in terms of targets, without incorporating the element of professional development employees may be thinking about.
3. Work/Life Balance
Research by Microsoft showed that Gen Z has more work-related problems than any other generation. It stands to reason. They’re starting their careers in a disruptive time and have to progress at a relentless rate just to keep pace with evolving technology. Employee burnout is by no means confined to the Wall Street masters of the universe. With the lines increasingly blurred between work and home, and the right to be “offline” up for challenge, employers need to show greater flexibility when it comes to accommodating their staff.
A corner office or snack trolley is no longer the apogee of office perks. The most sought-after employers offer a richer variety of perks that find time and space for personal growth, whether it’s opportunities for wellness, fitness or education. These benefits should be applicable to all employees too, and incorporate family-focused perks. Patagonia, for example, offers new moms on-site child care.
5. Build Company Culture
A toxic work culture is one of the biggest reasons why good people leave a company. It could be active, such as unethical behavior or bullying, or passive, such as a failure to progress on diversity, equity and inclusion (DEI) measures.
A business that stands for something as a company, on the other hand, with strong values that resonate with those of its employees is more likely to retain talent. That’s the values-driven ethos behind Groundswell, making it easier for companies to offer tax-advantaged charitable giving as an employee benefit.
6. Mentorship and Training
Even a master’s degree or MBA has an expiry date. Ambitious employees crave ongoing professional development and it should be customized to their role or needs. A team that isn’t learning will stagnate, so employers have to take the lead by offering bespoke learning opportunities. It’s not enough to attract the cream of the graduate pool. Employers need to grow their existing teams too to hold on to them.
The frequency and quality of feedback can be critical in retaining employees. It doesn’t have to be restricted to the official quarterly review, which often feels like a box-ticking exercise for Human Resources. When employees feel heard, understood and nurtured, they stay. When they feel overlooked or misunderstood, they seek fresh challenges.
On average, workers gain a 10% to 20% raise in base salary by switching employers, but the number on the napkin isn’t the only factor to clinch the deal. Employees are looking for transparency when it comes to pay scales, gender equity, the opportunity to access performance-related commissions and bonuses, as well as rewards that don’t necessarily feature on the pay slip.
Organizations with formal employee recognition programs can expect around 31% less voluntary employee turnover. Unfortunately, too many employees feel paid but not valued. As many as two-thirds of American employees claim to have received no recognition whatsoever for their good work in the last year. Employers can boost retention by establishing formal programs that enable top-down and peer-to-peer gratitude and recognition.
10. Support Flexible Working
Research from Prudential showed that 42% of American employees planned to quit if remote working was not an option. That’s the post-pandemic reality. Employers must recognize that the limitations of the office environment have been exposed and embrace the sharing of ideas and breaking down of silos across remote channels.
Retain Your Talent
Groundswell established charitable giving as a pillar of compensation. In turn, that allows your business to attract values-driven talent and reward them with a perk that matters. To find out more about our accessible philanthropy platform, contact us today.
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