Your workplace may be a “good” place to work but the truth is, your top performers may be just a LinkedIn message away from being head-hunted to another company.
Of course, it's only natural for employees to grow. People’s needs and wants for their career change—more so in our "quitting economy." Employees aren't staying in positions for decades. As Ilana Gershon, associate professor of anthropology at Indiana University notes: "Good jobs were ones with a good salary and benefits. Now, it’s one that prepares you for your next job."
Employee turnover is costly. Turnover affects the performance of an organization, and it becomes increasingly difficult to manage as competition for skilled employees continues to increase. Although COVID-19 had fewer people willingly leaving their jobs, research shows that the 2020 annual turnover rate was still 57.3%.
If your organization is experiencing this struggle, it's time to re-evaluate your retention strategy. Below, we dive into some essential employee retention factors that most modern employers ignore.
Work schedule flexibility
The way today's workforce approaches work is different from past generations. The old clock-in, clock-out mindset is an element of the past. Employers must prepare to accommodate the new workforce's sense of individualism. Workers today value flexibility—to choose when and where they work.
Though we have seen a greater increase in work flexibility in the past couple of years (primarily driven by COVID-19), many employers are still resistant to change. According to Statista, 5.1 million Canadians were working from home in May of 2021, and a similar number were working a mixture of at home and in office.
“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.
As the approach to work continues to change, the nature of work itself will evolve as well. Although work flexibility may not be possible for every company, it must be a discussion employers are willing to have. Parents or other caretakers appreciate the flexibility to work remotely for parts of their week, and a position that offers such flexibility will play heavily into employee retention.
Health and wellness benefits
When you think about workplace perks, what comes to mind? For many of us, happy hours and catered lunches are what make up the office perks we’ve come to expect, but in a world of remote and hybrid work, in-office perks no longer hold the same appeal.
Group health benefits have now become the standard rather than a bonus.
Where a company stands out and attracts/retains talent is in workplace wellness offerings. Factors such as a health spending account or a gym membership reimbursement—relatively small investments for the organization—are a way for employers to show they care about their employees’ health and wellbeing.
Mok Lan Ho, Director of Benefits of the Total Compensation Group at Scotiabank, mentions 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 eye-opening 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. (CAMH)
Offering a competitive health benefits package, including health and life insurance together with a retirement plan, is a retention strategy that’s 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.
Top performer recognition and rewards
It may seem like a no-brainer to reward employees for their achievements and milestones—but even the best managers can slip up on recognition. This may lead 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. Assigning monotonous work that lacks any creative aspect is a good way to have top performers looking for the 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. Most top performers list personal development as a high priority. Connect them with mentors to help them achieve their goals.
- 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 calculating, so the path to growth and advancement must be clear and communicated clearly.
Opportunities for personal development should be available for all employees. After all, when an employee learns and grows with their position, the business does better overall.
A lack of additional training could have top employees looking for another role that provides more opportunity for growth.
Be sure to have an open personal development policy. Empower your people to improve in the areas they wish to. Earmark a part of the budget for courses and conferences, and offer open lines of communication for employee feedback.
Learning and development opportunities encourage a culture of growth for everyone in the company. It lets employees know your company is one that values initiative rather than complacency. This is what’s required to keep the best employees happy in their positions—knowing that your workplace is one where they can not only succeed but grow.
The relationship between compensation and retention is not as straightforward as you may think. It may surprise you to learn that salary isn't the end-all-be-all for every employee.
In a study on the Determining Factors of Employee Retention, 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 the sole reason for employee turnover; it’s usually coupled with another major factor such as work-life balance.
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. Make sure that you offer a reasonable salary and balance it out with a stimulating and flexible work environment.
Onboarding and training
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 keyword here is realistic. New hires tend to turn over faster because their expectations don't align with reality.
The report also mentions socialization with other employees as a large retention factor. Research has shown that social wellness practices in the workplace—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.
Retention and turnover affect everyone in the company, not to mention your bottom line. Getting a handle on employee retention factors 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 provide stellar working conditions and keep your team happy and healthy.