Imagine losing some of your best employees because your organization did not create a welcoming environment for them. And now, calculate the cost you would have to pay for a new hire. Both result in a significant expense for the company.
According to LegalJobs, a better employee retention rate at an organization can maximize its profit by four times.
Employee retention strategies keep employees motivated and connected with their workplace. Along with saving your best performers, good employee retention strategies can help reduce the overall turnover cost as well.
Here are the top reasons why employees switch jobs:
Rigid working hours
A Gallup study states that 37% of employees prefer leaving their current organization for an offer that allows partial remote work. Moreover, 51% would switch their companies for flexible working hours.
Lack of recognition
Employees want to feel valued and recognized for their job. If not a monetary reward, a quick verbal appreciation can go a long way. Imagine never hearing a “good job” from your manager irrespective of the efforts you put in. Will your motivation remain consistent?
Checking upon the employees’ tasks and micromanaging are two different things. No employee is open to constant reminders and control over their tasks by the manager. An organization requires trust to operate efficiently and seamlessly.
A poor workplace culture
While it is subjective, there are a few generic practices for inculcating a good workplace culture in every organization. Clear goals, aligned missions, and a focus on employee well-being are a few examples of the same. A positive and disciplined work environment is a must for retaining employees.
Zero engagement among employees
Employees need an organization where people are well-bonded with each other. Engaging them in fun and interactive activities tells the employees that the organization is concerned about them.
35% of employees, mostly the younger talent, are ready to switch their jobs if they do not get a raise. They might not be aligned with the increment policy of the organization, find limited career growth, or feel that they are not getting paid as much as they deserve.
Is your organization facing any of these challenges?
Why is employee retention important for your organization?
Negative employer branding
Employee retention is a direct result of your company values and culture. A higher attrition rate automatically indicates the lack of a good company environment for employees. It can have a negative impact on your employer branding.
The expense of replacing the talent
In terms of business, retaining employees is a much more cost-effective solution than replacing them. Hiring a new talent requires extra investment in the recruiting process, training them, etc. Employee Benefits News stated that turnover costs employers 33 percent of an employee’s annual salary.
Loss of good talent
Regardless of how huge the expense is, you cannot replace the knowledge and skills that the organization lost. Every individual possesses unique skills. Not putting enough effort towards retaining them can lead to a loss in terms of their contribution to the company.
How can your organization retain employees better?
(Insights from The Shape of Work podcast)
Flexible working hours
In The Shape of Work podcast, our guest, Nishith Kumar (founder and CEO of Interstellar Systems), highlighted the significance of the work from the home model in employee retention. 70% of companies are implementing a hybrid workplace. It saves a lot of time that is generally wasted in traveling and allows the employees to stay in touch with their personal lives.
Even in an office workspace, the motive should be to give the employees their deserved personal time through flexible hours. It ensures an effective work-life balance and gives the employees a chance to be with their families.
Additionally, offering them the office perks like internet, furniture expenses, etc., helps in ensuring that they feel connected.
The significance of L&D:
Learning and Development plays a huge role in employee retention. Every individual expects growth in their workplace. If one finds zero scope of further learning, they might consider switching to other organizations. Clint Misquitta (Lead Learning and Talent, Edelweiss Tokio Life Insurance) explains the importance of Learning and Development through two perspectives:
- Organizational- contributing towards good learning opportunities for employees can offer better retention and productivity. The more an employee stays with an organization, the deeper their relationship becomes.
- Development- When employees upskill themselves, the entire organization benefits from it. L&D provides value and growth to the individual. Link learning with engagement and job productivity. When one achieves success, one strives for more. It is what, ultimately, leads to better retention.
“It is more about connection and empathy.”
According to Vipin Sharma (Head of HR at VT Netzwelt Pvt Ltd.), when people work from home, they have a different set of problems. Extended care is required on the company’s part here. There should be more platforms to meet their requirements.
Communication should shift from rational to emotional. Providing an environment that is more like an office (for example, WFH furniture) can offer them an emotional connection. Moreover, HR professionals play an important role in understanding employee concerns. That can only happen if they are transparent.
When you focus on these things, you make employees realize that your organization cares about them. It is bound to give you better employee retention.
A positive and productive work culture
According to Sumit Lakhani (Chief Marketing Officer, Awfis Space Solutions Private Limited) an employee spends half a day inside a workplace. Any person would want that place to be more happy, healthy, and engaged. There should be space for collaborations, learning, socialization, and more focused work or activities.
Sumit further mentions that employee negativity reduces employee morale and turns the most solid culture into a toxic environment.
A company with a great company culture has an employee turnover rate of 13.9 percent. Whereas, organizations that do not focus on the mentioned factor have a rate of 48 percent.
Different employee retention strategies in different sector
How can NGOs attract and retain talent?
Tyler Radford (Executive Director- Humanitarian OpenStreetMap Team) gives us insights into how NGOs retain their talent. These insights can help every organization (both corporate and non-profit) in terms of employee retention:
- Hiring people with the same objective: if you are in a non-profit organization, you would want to hire someone who focuses more on helping others rather than their salary. If you are hiring for corporate roles, you would want people with a particular set of skills. Not meeting this requirement can lead to an imbalance in the alignment between the employees and the organization.
- Providing flexibility to employees: rigid working hours in the office can be avoided by giving the employees enough time for their personal lives.
- Fun activities like yoga, meditation, or even analyzing work results daily enables talent to stay longer.
How to retain developers?
The demand for developers has seen a peak recently. It makes it difficult for organizations to retain them. Jeremy Tooley (CEO, Xerris Inc.) explains that it is a matter of culture. Plenty of developers are only money-driven. Hence, one cannot stop them from leaving.
What the organizations can do here is attempt and bring their employees to a level that imprints on them. If an organization cannot match the rates, they can offer other perks around employee benefits.
Managing Employee Turnover in the tech industry
- Firms must set clear goals for their employees.
- Leaders need to be more communicative and engage frequently.
- The work culture should appeal to a vast cross-section of employees.
According to Susan (CEO of XIL Health), novel and creative recognition strategies such as retention bonuses, stock options, profit-sharing, etc., are required to counter high attrition in the tech sector. The leaders should explain their mission and help the employees align and make a difference.
Over and above, replacing employees is never a better option until their goals are a misfit for the company. Help them learn and grow, and they will return it with good performance for you.
Additionally, lesser employee turnover adds up to better profits as well.
About the Shape of Work podcast:
All mentioned strategies are curated from our podcast.
The Shape of Work is a podcast series bringing insights into the future of work and how it is shaping our workplace.
We conduct plenty of more discussions around recruiting, HR solutions, employee well-being, etc. We have welcomed some extremely influential guests, having extensive backgrounds in the field of HR, Leadership and Development, Talent Management, and a lot more. With around 180+ episodes and 12,000+ downloads, it offers insights into making every organization a better place to work.