After spending so much time discussing “Quiet Quitting” and the “Great Resignation,” employers are now ready to hear about a much more welcome word: “Retention.” Forbes Human Resources Council has said that the average cost of replacing a worker can be up to two times the annual salary of that employee. On top of that, while recruiters are spending company time and money trying to replace the lost workers, there is declining productivity and morale from those that remain. Even the loss of a few employees can have a big impact on a company. After years of watching people leave their jobs, businesses are now striving to keep the workers that they have, and they have shown that they are willing to spend a lot of time and effort (and money!) to learn to do so.
What does employee retention look like in 2023? In the past, competition for workers came from within a radius of the location of the job. One had to be able to physically get to the office to be employed there. Now, though, the competition is global. With remote and hybrid options, employees can come from all over the world. Workers can perform their tasks at almost any location these days, and that means that they choose the companies they work for more carefully, not just choosing the company that is based down the road from them. For our series on employee retention, we are going to look at the basics of what it takes to retain the top talent you already have, starting with a discussion on why they leave.
“Should I Stay or Should I Go”
Whether or not employers like to think about it, many of their employees have considered leaving their current position, and not for the reasons they think. According to Forbes, the top five reasons that people left their jobs in 2022 are:
- Unhappy with management
- Unsatisfactory pay
- Poor work/life balance
- Lack of recognition and appreciation from management
- Not enough opportunities for advancement
Previously, competition for new workers was a numbers game; whoever could pay the most money got the best talent. However, as stated above, money is not the only factor when it comes to whether or not an employee stays at their position.
Workers today want more from their job than just a paycheck; they want to lead a fulfilling life inside and outside of work. Everyone is looking for that perfect work/life balance, and that has led to calls for more flexible working arrangements, more mental health days, and more of the other benefits that allow them to spend more time making the impact on the world that they want. Unfortunately, many businesses are finding that the costs of these benefits are becoming unsustainable. With the economy dealing with the fight against inflation and economic downturn, there will not always be a way to afford these perks.
Money Can’t Buy Happiness
The old adage rings especially true these days. Only one of the reasons listed above for why people leave a job involved direct financial rewards; so, to keep throwing money at salaries and bonuses will not solve it. For several of the issues listed above, money is the last thing needed. The solution to retention problems must also include fixing any issues with the culture of the office. In 2022, Goodhire conducted a survey and found that 82% of Americans would potentially quit a job if they thought their manager was doing a poor job. Another survey by Gallup discovered that employees that are recognized for their good work is 56% less likely to look for another job. That same poll also found that only 19% of workers feel that management has taken the time to do that. Teaching management to commit to employees will give those same workers the chance to recommit to their company. No matter how excellent the talent is when they get hired, a company will struggle to stay competitive if their employees aren’t capable and motivated by their managers to do their very best.
Researchers at the World Economic Forum have found that instead of paying for more benefits, companies should help their employees find their personal purpose at work. Why did the employee come to that company in the first place? What do workers like about their careers? Something that is especially true amongst the younger generations of workers is that they need have work that, as Marie Kondo would say, “sparks joy.” Along with recognition, they want to be employed by an organization that has committed to being diverse and inclusive. Leadership should be engaging their workers and connecting people to the world around them with town hall and small group discussions. Workers who feel that they are providing opinions and suggestions on how to improve the experiences of those around them are more likely to stay with their place of employment.
Some companies have instituted “stay interviews.” It has been deemed a highly effective tool in aiding worker retention; employees are being proactively asked what they like about their job and where improvements can be made. Finding out the answers to these questions is how employers can get ahead of any issues that are cropping up; employers are winning an employee back before they find a new job, thereby reducing the turnover costs. Something as simple as this can has been shown to drop turnover by 22% in one New England healthcare organization. These results can’t be ignored and can be easily instituted into a company without a lot of costs.
“Retention” is the word on every business owner’s lips this year, and it can be overwhelming to start looking into tips on how to succeed when it comes to keeping the talent your company has already worked so hard to win. However, groups like the World Economic Forum remind business owners that money can’t buy loyalty in times like these where employees are looking for a more well-rounded career that gives more than just a paycheck.
While we focused on the basics today, this series will continue forward with more ideas and insights into employee retention. Follow us and stay tuned for more information on how to retain your workers!
Meaghan Goldberg covers recruitment and digital marketing for Lionzone. A Patterson, GA native, after graduating from both Valdosta State University and Middle Tennessee State University, Meaghan joined Lionzone in 2018 as a digital recruitment strategist before becoming the social media manager.