Employee retention is a challenge that has been growing considerably in the last few years. Human capital management is becoming increasingly difficult, especially after the rise of The Great Resignation. As per a study conducted by the US Bureau of Labor and Statistics, the average turnover of employees is 20% in the public sector and 60% in professional services. Hospitality, retail and hotels that employ many freshers and part-timers are the most prone to employee turnovers.
Employee turnovers are detrimental to a company’s outlook, productivity, ethics, employee experience, revenue and much more. Therefore, it is time to invest thoughts, gather ideas and prioritize employee retention strategies before it reaches critical levels.
Before devising how to mitigate the risks of employee turnovers, it is important to dissect the challenge and understand why employees leave and what makes them stay.
Why Employees Leave
Employees leave for various reasons – voluntary and involuntary. The latter often goes unnoticed and we lose good candidates. Following are a few involuntary reasons:
Dissatisfaction: Unhappiness in the job role can be for any reason and can be mutual also. These instances directly impact the workplace environment and drive turnovers.
Better opportunities: Often, an employee may get a better salary for the same or better role in a different organization. This deals with the quality of work at hand and growing competitiveness in the industry.
Planned changes: Some people plan their exit or break in advance, for example, pregnancy, acceptance into a degree program, moving to a new place, etc. Many professionals draw a career map and decide their tenure according to their skills and future demands of the industry.
Impulse: Humans often act on impulses and decide their career path on split-second decisions. Such feelings can also be triggered due to a negative experience in the workplace, lack of mentorship, or increasing difficulties with work.
Employers must note that these decisions can be fuelled by either an individual’s personal desire to move on from the organization or workplace challenges that were affecting their performance.
Why Employees Stay
Numerous employees stay for longer periods in their organization and develop personal and collective growth. These are examples of good management, trust within the departments and a clear vision of progress.
After spending some time in the organization, employees become invested in their professional and social spheres. Soon, they start developing a set of skills that take them forward in their career and a web of connections that help them stay up-to-date in the industry. These points, coupled with a healthy workspace, ensure that employees align their future with the company’s mission.
The onus is on the employers to be responsive to the needs of their employees. Recognizing talent, appreciating their achievements and better engagement instills confidence in the entire workforce. In such scenarios, employees are more likely to stay in one firm longer and not be lured by other opportunities.
A Holistic Approach to Employee Retention
Since mass resignations are a concerning obstacle for organizations worldwide, it is important to prepare strategies that counter this movement. The following employee retention strategies will help solve major areas that directly contribute to large-scale turnovers. Furthermore, they will boost company outlook and enhance their value in the job market:
Effective hiring
According to Glassdoor, 35% of employers hire in anticipation of a future turnover. This is a major concern as it raises questions about an organization’s recruitment policy and work culture. An SHRM study reveals that 83% of organizations face difficulties in finding the right candidate. Furthermore, the US is expected to face a significant labor shortage by 2029.
Devising a reliable hiring process that filters good candidates from the lot and mentions key information and responsibilities in the job description will help scout the right personnel. Avoid sugar-coating various aspects of a job and maintain a professional tone in recruiting collateral.
Smooth onboarding
The growth trajectory of every employee begins right from their recruitment. A smooth onboarding experience sets the tone of the employee’s professionalism. A study reveals that nearly 60% of remote employees who received a good onboarding experience are likely to spend more than three years in the company.
Essential support from the first day itself will go a long way in establishing reliability between the employee and the employer. Onboarding must also include teaching about the company culture and how to thrive in the environment.
Recognition and awards
Employee motivation and recognition go a long way in creating an environment of trust and productivity. 68% of HR professionals agreed that positive affirmations and a recognition program contribute heavily towards employee retention and recruiting talent.
It would be best if you build recognition programs around the company’s work ethics and talent strategy for better impact. The program should include clear guidelines and thresholds for awards, including incentives and time offs on the basis of performance reviews. Additionally, include special circumstances within the recognition program to give better rewards during tighter deadlines and challenges.
Wellness initiatives
Apart from workplace challenges, employees deal with numerous health and wellness issues that affect their performance. In a pro-employee workplace, leaders should introduce numerous wellness initiatives which ensure a sound body and mind of the employees.
As a part of their employee retention plan, organizations should offer a range of benefits that are focused on the health of their employees, for example, gym memberships, employee assistance programs, therapy sessions and much more. Meditation and stretching breaks in a workplace also help relieve work-related stress and generate fresh ideas.
Learning programs
A LinkedIn study concludes that nearly 94% of employees would not turnover if the company invested in their career growth. With time, the need for multiple skills is growing and high-ranking professionals are working hard to become versatile and juggle numerous roles. Furthermore, upskilling is a win-win strategy for both the employer and employee, as the former gains experience and learned personnel while the latter gets a better understanding of the industry and creates a better future.
Organizations can offer degree programs or sponsor similar initiatives to enable employees to learn better and contribute to the company’s vision. Upskilling will help employees keep pace with the market’s growing demands and accelerate the organization’s digital adoption. Furthermore, companies can be ready to solve a number of anticipated challenges with a bunch of skilled professionals at their disposal.
Various firms are partnering with private universities to provide readily available courses for their employees and future-proof their success. This is an opportunity for employers worldwide to ensure highly skilled employees remain dedicated to the collective goal.
Another advantage is the reduced cost of hiring for advanced roles, as companies can promote skilled personnel to additional responsibilities. This will significantly reduce the time and resources required in hiring someone new for the same role.
Competitive pay
One of the biggest reasons an employee moves on is their desired pay scales. With the marketplace across industries becoming incredibly competitive, employees are looking for a detailed salary structure, including benefits and incentives, which many organizations do not cover in their strategy. Therefore, companies must stay ahead of the curve and provide competitive packages with complete transparency about pay scales and the structure.
There are many dimensions in salary packages that companies must consider. Equitable pay, variable pay, health benefits are some of the ways organizations are diversifying the pay scales.
Regular assessment of salary packages, monitoring the growth and contribution of the employee, and factoring in the marketplace trends can help draft an offer that is suitable to both parties. Incentives and consistent appraisals for their hard work are also necessary compensation for professionals.
ESOPs
Employee Stock Ownership Plans (ESOPs) are also an effective way of rewarding employees. These plans are now globally accepted as a new standard of employee compensation, motivating the workforce to achieve bigger goals and igniting the entrepreneurial spirit.
Considering the high rate of success in retaining employees, Forbes advises companies to consider ESOPs as the first and not the last resort. With vested stock options, employees can align themselves with the vision of the company and drive long-term growth. This reaps multiple benefits for both employees and the company. The former gains tax incentives in addition to significant profits over time, opening a new channel of wealth creation. On the other hand, companies formulate a new compensation plan and effectively attract and retain highly skilled talent.
Conclusion
The above talent retention strategies are just a few ways to build a skilled and committed workforce for the long term. To constantly emerge as a desirable workspace that signifies both company and personal growth for professionals, companies are advised to regularly conduct internal analysis and evaluate themselves from an employee perspective. This includes improving work culture, staying updated on market standards for pay and benefits and strong relations within teams.
Multiplier helps global companies onboard and manage remote employees. Our digital platform assists you in faster and compliant onboarding, providing ESOPs, adding benefits and insurance for employees, and a lot more. Furthermore, our resources, like salary guides and TalentWiki, shed light on the hiring trends in any country, helping you gain in-depth knowledge about international employment and tackling numerous challenges like employee retention.
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