Have you noticed an increase in voluntary turnover? How many employees have left your company because of schooling, spouses and location transfers, retirement, personal issues, or impulsively quitting? Perhaps it’s involuntary turnover from layoffs or dismissals? Employees leave organizations for all sorts of reasons.
A SHRM survey in 2018 concluded that employee retention was the top workforce management challenge cited by 47% of HR professionals. Now in 2021, the Bureau of Labor Statistics reports, the overall turnover rate is 57.3 %. These statistics become increasingly alarming as the pool of talented candidates is slim. Tracking employee turnover and retention is the first step. The real work begins when you assess these rates and identify what needs to be done to improve your retention strategies.
Retaining Employees involves keeping them motivated and focused, so they choose to remain employed and fully productive for the organization’s benefit. Therefore, it is vital to keep critical employees by developing an effective employee retention program. In addition, it is more efficient to keep an existing employee rather than recruiting, training, and orienting a replacement employee of similar quality.
Reasons to concentrate on reducing turnover:
- Turnover is expensive.
- A company’s performance suffers from turnover.
- With skilled employees becoming increasingly harder to find, it may be harder to retain them.
- The knowledge and expertise of an employee are lost when they leave. But, unfortunately, there is no way to get all the loss back, even if you work diligently to make up for it.
The following metrics should be monitored with the AHP retention formulas to help determine employee stability when creating an employee retention strategy.
- The average turnover is related to promotions or transfers.
- The average tenure of your employees.
- Tracking positions filled vs. open positions.
- When measuring the turnover rate, break them into three categories: Voluntary, Voluntary, and employees noted as high-performing.
A person will likely stay with an organization if the pay, employment conditions, career opportunities, etc., are comparable to or greater than they need to provide (e.g., time and effort). The decision to leave an organization is shaped by two factors: the individual’s desire to leave and the conditions of the organization. The drive to retain valuable employees and the reasons they leave an organization must be understood.
Solutions aren’t effective without understanding the problem, but it happens often. Assessing your current circumstances is the first step in reducing turnover and keeping employees. Next, learn about the retention problems you’re facing, and determine what you’ll do to rectify them. Retention issues are often connected, and solving one can help you solve others.
Problem: Lack of recognition
An easy and cost-effective way of improving retention is recognizing employee contributions. Even well-compensated employees who do not feel appreciated for their work are much less likely to stick around for very long.
Solution: Build a genuine culture of recognition.
21% of people list recognition as the principal reason for remaining at their current employer. Recognizing contributions promptly and frequently ensures they are appreciated at the moment of greatest significance. Employees should also see how their contributions and their colleagues’ contributions align with the mission and culture of the organization. It helps the whole team understand the bigger picture behind their work and how their big or small contributions help drive the company forward.
Problem: Lack of trust
Every working relationship operates on a balance of mutual trust. A lopsided balance of faith is a significant factor in employee turnover. A Tolero study found that a lack of trust is the reason 45% of employees quit.
Information is an important tool that you can provide to your employees. To make sound business decisions, employees need to feel they are given the correct information. It’s both demoralizing and inefficient to do your work on a need-to-know basis.
Solution: Embrace transparency
Transparency is the natural remedy for a lack of mutual trust. Increasing transparency is one of the best ways to improve mutual trust within an organization.
The amount of information suppressed without good reason, how much mutual trust improves, and how many great ideas and initiatives spring from the increasing access to information might surprise you.
A manager who constantly looks over their employees’ shoulders can cause tension and paranoia that ultimately leads to dependency. When employees feel like their ideas are invalid or are always afraid of criticism, it eventually takes its toll on creativity.
Employees want a sense of autonomy. People will feel suffocated if they aren’t able to make even a little decision without management input. In the end, employees who think they can’t do anything right will stop trying altogether. When talented employees are micromanaged, they often do one thing; quit. It’s not pleasant to come into work every day and feel like you’re working in a prison, being watched at all times.
Solution: Embrace Autonomy
Micromanagement can be combated most effectively by fostering employee autonomy and allowing employees the freedom to perform at their best. However, this does not mean you need to eliminate management positions or flatten your organizational hierarchy completely.
HR professionals can play a role in preventing dissatisfied employees from leaving. They are on alert for signs of employee dissatisfaction. A retention strategy must be developed and implemented by all functions within an organization to enhance and ensure employee retention. Human resources practices have a significant impact on retention, and all HR roles have a part to play in its implementation.
- Training and development
- Compensation and rewards
- Employee engagement
A firm’s ability to keep top talent will determine whether it succeeds or fails in the long run. A loyal team of happy employees is one of your most valuable competitive advantages. Build a team, provide them with the proper training, tools, and support, and then give them room to get the job done!