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 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 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 the competition for skilled employees continues to increase. Findings from a Chartered Institute of Personnel Development (CIPD) study on employee retention factors found that more than four-fifths of employers had difficulty retaining employees.
If your organization shares this struggle, it's time to re-evaluate your retention strategy. Below, we dive into 8 essential employee retention factors most modern employers ignore.
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. 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.
“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. We don't believe work flexibility should be mandatory for every company, 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.
2. Health and wellness benefits
When you think about workplace perks, what comes to mind? For many of us, thoughts of free food and coffee are often a part of the 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 workplace wellness offerings are actually being provided.
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.
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.
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.
4. Personal development
Opportunities for personal development should be present and available for all employees. After all, when an employee learns and grows with their position, the business does better overall.
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%) asked 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 may wish to incorporate new customer relationship management software into the sales process to increase efficiency, thus requiring more training. Sure, you could turn down his request and stick to your old fashioned CRM software, but he may eventually seek out a more progressive company willing to take risks and modernize -- the choice is up to you.
Be sure to have an open personal development policy. Empower your people to improve in the areas they wish to expand in. Have extra budget for courses, conferences, and books and offer open lines of communication for employee feedback.
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.
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.
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.
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.
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.
7. Management and leadership team
Employees don't quit because they don't like their jobs, they quit because they can't work with their managers or leaders.
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). Start with communication. Feedback and open communication are essential for the improvement of any high performing team.
8. Onboarding and training
Employee retention strategies are needed right from the get go. Starting from day one, 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.
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 it employee retention factors 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 providing stellar working conditions and keep your team happy and healthy.