When it comes to talent management, one of the top concerns for organizations is employee retention.
In part one of this five-part series about talent management, we explored the challenges of recruitment and talent acquisition. Subsequently, we discussed the importance of a thoughtful and well-integrated onboarding process for new hires and the role of professional development plans in employee success.
Even with concerted efforts to recruit the best people and onboard them well, organizations struggle to retain their best people.
Why Organizations Have Employee Retention Issues
There are many reasons why employee retention is such a struggle.
- After the Covid pandemic, we’ve been experiencing The Great Resignation, with employees quietly quitting and looking for different opportunities.
- The lessons we learned during lockdown changed the way many folks view work. We can slow down, have success working remotely and have better mental health when there’s work-life balance. Additionally, workers have many more remote-work opportunities now than ever before. On the other hand, many organizations are finding it difficult to maintain momentum and strong cultures with employees not gathering together to work as teams.
- Organizations have to be future-ready, with leaders and team members who are agile and able to handle radical disruption. Employees will leave for better opportunities and support for professional development and reskilling.
- When employees don’t feel they have opportunities for growth or when their values no longer line up with the company, they will leave. It’s rare for employees to stay with one employer for their entire career now, and turnover happens even more when folks start to question whether the company’s stated values are really values they live by.
For years, we’ve said that what people need and want from an employer is much more than a fair wage and an enticing bonus. They need to be seen, heard and understood; they need to feel there is value and purpose in the work they do; they want emotionally intelligent leadership; they want to know what’s happening in the organization; and they want feedback.
The Cost of Poor Employee Retention
Low employee retention rates are costly. According to the well-respected American technological research and consulting firm Gartner, employee turnover is 50- to 70-percent higher than in past years, and the time it takes to fill a role has increased by 18 percent post-pandemic. Gartner also notes that around 40 percent of HR leaders report they can’t build skills development solutions quickly enough to keep pace with workplace needs.
According to Human Resources Director (HRD), an estimated 42 percent of workers are planning to find work elsewhere, and the cost for lost productivity and rehiring to replace one frontline worker averages around $30,674. That cost escalates, the more senior the role. HRD notes that roughly 15 percent of Canadian employers reported that turnover costs them more than $100,000 annually.
The further, hidden other cost of turnover is the burden faced by the workers who remain, who must cover until a replacement is found.
Understanding Why People Leave
It’s vital that leaders and HR professionals understand why people are leaving. Here are some of the most common reasons for leaving:
- Lack of professional development
- No hope of advancement opportunities
- Easier to leave to advance or make a lateral move
- Unsupportive management
- Toxic workplace, especially when there’s unhealthy conflict or high-performers who can’t play nicely with others
- Increased demands and workload
- Feeling overworked. overwhelmed and burned out
- Better perks offered elsewhere, including remote work
Understanding WHY folks are leaving your organization is vital to planning an effective retention strategy. You can offer all the professional development you want, but if employees are fleeing from a terrible manager, training opportunities aren’t going to convince them to stay. Make certain there is an offboarding process in place, with your HR professionals asking for candid feedback to understand why an employee is resigning.
More Strategies to Improve Employee Retention
Ideally, the goal of talent management is to help talent and the organization thrive. That should also include building up skills across the workforce so that promotions from within the ranks can help to build a robust succession plan.
Here are some more ideas to improve employee retention:
1. Think about talent development more broadly.
Often, leaders think that talent management means promoting top talent and providing progression up the ladder for key people. It’s time to shift from thinking about the corporate ladder to thinking about a non-linear career path. What other directions could develop talent? Would leadership coaching elevate leadership? Are there projects or other departments that would support someone’s growth and leadership development? How can managers and leaders build connections across the organization? Are there opportunities for collaboration (some call this “borrowing brilliance”) that could build skills? Encourage leaders to think beyond retaining their own team members to retaining employees from across the organization.
2. Build a solid culture that makes people want to stay.
The foundation of a strong team is moving away from unhealthy conflict to building healthy conflict. It’s possible to build a company culture of growth and happiness, and it starts with celebrating wins and cultivating gratitude. There are also many benefits to having a coaching culture, which has a ripple effect throughout the organization. A good corporate culture will attract people because creating an inclusive workplace that recognizes the benefits of diversity supports creativity and business success.
3. Have one-to-one meetings regularly.
Establishing regular one-to-one conversations with team members creates stronger connections and gives managers or leaders the opportunity to really understand what motivates employees. In addition to asking about current projects, delve into their career satisfaction and aspirations. What is interesting and rewarding? What’s challenging? Are there other projects or responsibilities that interest them? It is important to have effective stay interviews regularly, to check what’s working for your team members and what would help keep them motivated and wanting to stay at your organization.
4. Find more opportunities at work for folks.
Consider what skills your team members have, and then look for ways they can use them and grow their skills on the job. Are there committees that they should be participating in? Is there a project that would suit their skills? Who would be a good mentor? Also, consider opportunities for your team members in other departments and for folks from other departments to get work experience on your team.
5. Make sure feedback flows.
Leaders and managers should be providing regular, valuable feedback to their team members. Set clear expectations, and then provide regular feedback about what’s been successful and what might be an area for improvement. Check out our elements for effective feedback to avoid common pitfalls, and consider using a feedforward approach when you need to have a conversation to improve performance that looks forward, using what happened to boost success in future. Additionally, leaders and managers should be open to feedback and able to handle criticism from their team members. Not only is it important for employees to feel that they have a voice and their concerns are heard, leaders need to know how people really feel and what’s happening to be able to drive success.
Improving employee retention is critical to organizational success by retaining top talent. Workers recognize their value and are more likely to stay where they feel their contributions matter, their efforts are recognized and their career path has options.
Coach’s Questions
How is your organization doing with recruitment and employee retention currently? What new strategies could help? What’s something you can start this week?