8 Essential employee retention factors that modern employers ignore
Employee
retention factors are more important than ever. An employer’s ability to retain
employees is no longer an aspect of being a “good” place to work. Top
performers are literally a LinkedIn Inmail message away from being snatched
from the team you’ve worked so hard to build.
Of
course, it’s only natural for employees to grow. People’s needs and wants for
their days spent at work change — more so in our “quitting economy.” Employees aren’t staying in positions for decades notes Ilana
Gershon, associate professor of anthropology at Indiana University,
Bloomington, “Good jobs were ones with a good salary, benefits, etc. Now, it’s
one that prepares you for your next job.” Let that sink in for a while…
Modern
employers are no longer just responsible for providing employment. To receive
optimal output from a hire, a modern employer must have it all plus prepare
them well enough to move on (quite the tall order if you ask me!).
Employee
turnover is costly, it affects the performance of an organization, and it
becomes increasingly difficult to manage as the availability of skilled
employees continues to decrease. A failure of a business’s employee management system and process are often at fault.
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Findings
from a Chartered Institute of Personnel Development (CIPD) study on employee retention factors found only 22% of employers
had no difficulty retaining employees. That leaves the 78% of employers who do.
So where does that leave your business? Unless you have unimaginable amounts of
cash to throw at top tier employees like Google does you’ve got to rethink your retention strategy.
In
this article, I’ll dive into 8 essential employee retention factors most modern
employers ignore.
Retention Factor #1: Work Schedule Flexibility
The
way today’s workforce approaches “work” is different than past generations. The
old clock-in, clock-out mindset is an element of the past. Employers must
prepare and accommodate for a new workforce’s sense of individualism. All to
say workers today value flexibility — to choose when and where they work.
Though
we do see an increase in work flexibility year over year, many employers are
still resistant to change. More than 1.7 million paid employees — those not
self-employed — worked from home in 2008 at least once a week, up almost 23% from the 1.4 million
in 2000, according to the latest Statistics Canada report on the subject in 2010.
“I
think it just reaffirms what we have been feeling in the industry, that the
workforce is changing and we need to adapt as industry leaders. Employers are
driving it but employees are embracing it,” said Faith Tull, senior vice president of human resources at Randstad, a major technology
recruitment firm.
As
the approach to work continues to change, the nature of work itself will evolve
as well. We don’t believe work flexibility should be mandatory, but it must be
a discussion employers are willing to have. New parents or people dealing with
family issues appreciate the flexibility to work remotely for parts of their
week. And a position that offers such flexibility will play heavily into
retaining them.
Retention Factor #2: Health and Wellness Benefits
When
you think about perks in workplaces, what comes to mind? For many of us,
thoughts of free food and coffee are often a part of office perks we have come
to expect. Group
health benefits have become the
standard rather than a notable differentiator when choosing whether or not to
stay with an employer. Where the difference comes into play is what is actually
being offered.
We
spend almost 60% of our waking hours at work. Meaning our workplaces have a
huge impact on shaping employee lifestyle, eating habits, and overall health.
Are you making sure your employees are as healthy and supported in their
efforts as they could be?
Factors
such as a health spending account or a gym membership reimbursement —
relatively small investments — simply show that employers care about their
employees’ health and wellbeing.
Mok
Lan Ho, Director of Benefits of the Total Compensation Group at Scotiabank,
admits in a Monster.ca article that employers often struggle with the concept of
wellness. “Many companies face the challenge of determining what wellness means
to the organization and within its cultural environment. Most define wellness
in the form of activities and events.”
The
article also notes that the current lack of health support for employees by
employers has a huge impact on employee stress levels. The stress created by a
lack of health support or stress management outlets can negatively impact every
area of the business. Not convinced that you need to start supporting your
employees in their overall health and well-being? Here are a few scary facts
that might make you change your mind:
·
Stress-related
absences cost Canadian employers about $3.5 billion each year. (Statscan)
·
Health care
expenditures are nearly 50% greater for workers who report high levels of
stress. (Statscan)
·
20% of Canadian
workers experience a stress-related illness each year. (Canadian Mental Health
Association)
·
83.1% of Canadian
workers identified stress as the major health concern within their
organization. (Canadian Mental Health Association)
·
Stress in a business
contributes to 19% of absenteeism costs, 40% of turnover costs, 55% of EAP
costs, 30% of STD and LTD costs, 60% of workplace accidents, and 10% of drug
plan costs. (Chrysalis Performance Inc research)
Offering
a competitive health benefits package, including health and life insurance along with a retirement plan is a retention strategy worth
investing in. When you support health and wellness throughout your company, it
alleviates stress and allows employees to focus on doing their best work.
Retention Factor #3: Top Performer Recognition and Rewards
When
milestones or targets are achieved are your employees recognized? Are they
rewarded? Or are they given a pat on the back and sent right back into the mix?
Failing
to recognize Jeff in accounting for an efficient end-of-year filing or
Stephanie in marketing for a viral go-to-market campaign is poor communication
by an employer and highly ineffective. Furthermore, this seemingly small
managerial issue will likely grow into a much larger problem in the future.
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It
may seem like a no-brainer to reward the employees keeping the lights on but
even the best managers let things slip through the cracks. It’s often no fault
of their own but of a poor employee
management system. It leads to an
environment where going the extra mile just isn’t worth the effort for a top
performer.
Inc.com
published a savvy article on 5 ways to keep top performers at your company. Here are the cliffnotes:
- Keep
them entertained. Whether that be through
creative projects or exciting social events. Assigning monotonous work
lacking creative aspects is the best way to have a top performer looking
for an exit.
- Give them visibility.
When goals are met, give those responsible the spotlight. Praise them
appropriately throughout the company and ensure that management takes
note.
- Provide them with mentors.
Every top performer lists personal development as a high priority. It’s
what makes them successful. Connect them with mentors to help them achieve
their goals and they’ll surely thank you for it.
- Make them responsible—and then
reward them. When they’ve proven
themselves time and time again, give top performers more responsibility.
More responsibility is a signal of trust. And developing a relationship of
trust will only strengthen their investment in your business.
- Create clear pathways for
growth and advancement. It goes without saying, the
definition of success at your company should not be a mystery. Top
performers are calculated. Therefore the path to growth and advancement
must be clear. As with everything, the path must be often and clearly
communicated to everyone on your team.
Retention Factor #4: Personal Development
Opportunities
for personal development should be present and available for all employees.
Afterall, when an employee learns and grows with their position the business
does better overall.
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Global
Market Insite, Inc. (GMI), a provider of global market intelligence solutions,
surveyed over 5,000 full and part time workers in international markets. When
asked what a boss could do more of, Canadian workers’ top priority (39%) was
“use my skills and abilities” and a quarter (26%) asking for bosses to
‘encourage my development’.
A
lack of additional training or opportunities to grow skills could have top
employees looking for other positions that will provide them with more
experience. A top salesperson, for example, may wish to incorporate new
customer relationship management software into the sales process to increase
efficiency. Thus requiring more training. Sure, you could stick to your old
fashioned CRM software and ignore his requests. But he may eventually seek out
a more progressive company willing to take risks and modernize — the choice is
up to you.
Opportunities
like these encourage a culture of growth for everyone in the company. It lets
employees know your company is one that values initiative rather than
complacency. And that’s what is required to keep the best employees happy in
their positions — knowing that your workplace is where one can not only succeed
but grow.
Retention Factor #5: Compensation
The
relationship between compensation and retention is not as straightforward as
you may think: A top performer is cooking up an exit strategy? Throw
more money at them! It may surprise you, but cash isn’t the
end-all-be-all for every employee. One may be unsatisfied for any single reason
on this very list.
Granted,
it is tricky to hit the sweet spot when it comes to compensation.
In
a 2016 study on the Determining Factors of Employee Retention in the Open Journal of Social Sciences,
researchers concluded that, “improved compensation can only increase retention
capability in the short-term. For organizations to be more efficient in their
attempt to make more employees stay in the organization for a long period,
improved compensation should be coupled with quality of worklife.” In other
words, compensation is not a sole reason for employee turnover; it is coupled
with another major factor such as work-life balance. We’ve all heard the
stories of high-powered executives being paid seven figures who quit their jobs
to go live in a van and travel the continent.
It
goes without saying that having competitive, market-level wages is the first
step. The next step is getting to know your employees, their motivations, and their
goals. It is the idea route any employer can take. In short, make sure that you
offer a reasonable salary and balance it out with a stimulating and flexible
work environment.
Retention Factor #6: Work-Life Balance
As
you’ve likely noticed work-life balance has become a major focus in today’s
workplace discussions. There are countless ways employers can send a clear
message that their employees and their lives outside of work are important.
Helping beyond providing a paycheque goes a long way to keeping top performers
in their positions.
Photo by John Schnobrich on Unsplash
In
a 2016 report by Statistics Canada, parents surveyed cited not having enough time for family as
their number one complaint with their careers. The survey found that time
absent from their spouse or partner was associated with lower satisfaction with
their work-life balance.
The
survey concluded that having a flexible schedule that enables individuals to
choose when their work day starts and ends was associated with slightly greater
satisfaction. In fact, 79% of employees with a flexible work schedule reported
that they were satisfied or very satisfied with their work–life balance,
compared with 73% of those whose schedule was not flexible.
As
mentioned earlier, offering work flexibility is a great place to start in
developing your employee retention strategy. Of course, one should not blindly
start letting employees arrive at 2pm and leave at 5pm. Figure out what really
matters to your employees first. Childcare, additional vacation days,
subsidized gym memberships or public transit passes are a few retention factors
that may compel employees to stay put.
Retention Factor #7: Management and Leadership Team
Employees
don’t quit because they hate their jobs, they quit because they hate their
managers. You’ve heard this before. We’ve all been in positions that we’ve had
to leave because of an inept manager or executive team. Don’t let your company
be part of the problem — be better managers!
Start
with communication. Feedback and open communication are essential for the
improvement of any high performing team. Steve Miranda, Managing Director of
the Center for Advanced Human Resource Studies, Cornell University ILR School
estimates that 80% of turnover is driven by the environment a manager creates
for an employee (compared to 20% resulting from issues with company culture).
Because of this, any investments you make in training and development for your
line managers are well spent (source).
Lastly,
be sure to have an open personal development policy. Empower your managers to
improve in the areas they are lacking. Have extra budget for courses,
conferences, and books and offer open lines of communication for employee
feedback.
Retention Factor #8: Onboarding and Training
Employee
retention strategies are needed right from the get go. Afterall it’s the
employee who ultimately decides if they stay or go.
As
stated in a report on managing employee turnover from SHRM, “Evidence suggests that recruitment practices strongly influence
turnover. Considerable research shows that presenting applicants with a
realistic job preview during the recruitment process has a positive effect on
retention of those new hires.” The key word here is realistic. New hires tend
to turnover faster because their expectations don’t align with reality.
Photo by Nik MacMillan on Unsplash
The
report also mentions socialization with other employees as a large retention
factor. Research has shown that socialization practices—delivered via a
strategic onboarding and assimilation program—can help new hires become
embedded in the company and thus more likely to stay.
These
practices include shared and individualized learning experiences, formal and
informal activities that help people get to know one another, and the
assignment of more seasoned employees as role models for new hires. Set
yourself and your new hires up for success by planning an unbeatable onboarding
process and having it ready to go before you start hiring.
Wrapping Up
Your
best employees will leave. It might not be today or tomorrow, but a day will
come when your best and brightest will depart for greener pastures. And that’s
ok. The best an employer can hope to do is meet employee expectations today.
Some
employers are doing their best to provide stellar working conditions, yet
others are failing to do even the minimum. Retention and turnover affect
everyone in the company, not to mention your bottom line. Getting a handle on
it is no easy task, but doing so pays dividends far into the future. It never
hurts to regularly review your retention strategy to ensure you’re doing the
best you can to keep your team happy and healthy.
There
you have it, 8 employee retention factors overlooked by most modern employers.
What are you doing to keep star performers at your company? What interesting
perks, programs, or incentives are you providing? What’s working, what’s not?
Weigh in and leave your comments for me on Twitter, Linkedin or Facebook!
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