Do challenges in employee retention have you feeling concerned? If so, you’re not alone.
In the final quarter of 2023, HR leaders reported feeling their optimism surrounding employee retention and engagement was waning. What’s more, reports find that many workers aren’t feeling quite so confident either—many have doubts about stability across their workplace or are questioning leadership—but they’re also reportedly feeling lower satisfaction in the workplace experience overall. By some accounts, employee turnover is likely to be 50 to 75 percent higher than in pre-pandemic times, and it’s anticipated that it will take 18 percent longer to fill open positions.
This reinforces the data that employers expect to face a higher level of turnover in the first half of 2024. Here’s what you need to know about retention, as well as some of the biggest challenges in employee retention—and what you can do about them.
About Employee Retention
Before diving into some of the challenges regarding employee retention, it’s important to understand what employee retention means—and why it matters.
Employee retention is all about a business or organization’s ability to keep and engage great employees. It’s often shared as a percentage, and the higher, the better. Your employee retention rate looks at how many employees stay with your organization during a set time period.
As an example, having an employee retention rate of 85 percent for 6 months would mean that an organization kept 85 percent of its employees during that time.
Another important factor regarding employee retention is that retention rates can vary a great deal between industries and types of businesses—but also based on the kinds of employee retention strategies they use. It can be a challenge for many organizations, which is why it’s important to know what these problems are and how to face them head-on.
These challenges can be unique from company to company and vary greatly between industries, but ultimately, establishing a sense of awareness about the reasons behind these challenges can provide a clear path to address them. For example, we have learned that 23 percent of corporate restaurant managers we have polled left their positions because they were recruited by another company—while another 23 percent left because of personal reasons. But without this knowledge, these restaurants might not address the factors that made it easy for a recruiter to persuade an employee to take a position elsewhere or take a look at what strategies they can use to help employees tackle personal challenges.
8 Challenges of Employee Retention
Let’s uncover the key factors influencing employee retention and provide actionable tips to cultivate a workplace environment where employees feel valued, motivated, and empowered to succeed.
1. The Feeling of Stalled Career Growth Opportunities
Employees may consider looking for a new position at a different organization if they feel like they don’t have the opportunity for growth or advancement. They might be facing some of the following frustrations:
- Not getting the role or promotion they want
- Not being paid a competitive salary or hourly wage—or lack of additional benefits
- Not having room for career advancement
The good news? You can overcome this challenge by providing guidance and support—and researching competitive wages in your area. Offering transparency in career pathing, holding performance reviews to learn your employees’ career goals, and providing coaching on how to get there. You may also opt to offer a Leadership 360 survey and development programs or mentorship programs to help your employees identify and work toward their goals—and feel supported in the workplace.
Additionally, ensure that your compensation and benefits packages mirror industry standards—otherwise, you may find it particularly challenging to keep talented employees long-term. Working in the field for years, we have found that compensation has been an important factor in a manager’s decision to leave their position at a restaurant 20 percent of the time.
2. Poor Management
One of the most common reasons many workers report as the reason behind parting ways with a company has to do with their supervisors. The reason? Either they didn’t get along with their manager or they just didn’t feel supported by them.
One study found that 57 percent of survey respondents had left a job at one time or another because of leadership—and another 32 percent said they had at least considered leaving their position because of management.
During our exit interviews with former staff, we’ve found this to be true time and time again. Our findings show that at least 17 percent of non-restaurant employees reported that their management team was their top reason for leaving.
Knowing that issues in management are a contributing factor is the first step in addressing these challenges through training, education, and building awareness.
3. Struggles with Work-Life Balance
Employee burnout is real. In fact, 50 percent of employees reported experiencing burnout at work. Today’s work environment is fast-paced, which can encourage the feeling that employees have to work non-stop. But this can certainly lead to employee burnout, which is not great for you or your employees, and can contribute to decreased productivity, more frequent absenteeism, and higher levels of turnover.
One suggestion to counteract an imbalanced work-life balance is more flexibility—whether that be in scheduling, working arrangements, or available time off. These options give your employees a chance to find better balance and rest and recharge. This will foster a positive work culture where employees feel valued as people, not just for what they offer your company.
4. Not Enough Onboarding
One of the most important things your employees need to feel in the workplace, regardless of whether you are in person, remote, or hybrid, is support. But if they don’t get adequate training as new hires, they may not feel like they are in the right place—which means they may take off faster than either of you would like.
This means that if you haven’t already, you need to develop a formal, comprehensive onboarding process. Your onboarding program should cover all the job-specific training needed to set new hires up for success and feel that they are fully up-to-speed on your workplace culture; and that they have a sense of belonging. You may even opt to partner new hires with mentors to help them feel welcomed.
5. Lack of DEI Prioritization
Valuing diversity, equity, and inclusion (DEI) in your workplace isn’t just a wise practice, it’s good for retention, too. The proof is in the numbers: organizations that have DEI initiatives are 2.6 times more likely to increase employee retention.
Without a DEI initiative, your employees may not feel welcomed or accepted in the workplace the way you might want them to, causing them to seek employment elsewhere. As it stands:
- 78 percent of active workers share that they believe it’s important for organizations to make DEI a priority.
- 66 percent of today’s workers think progress on DEI is not advancing fast enough.
- Almost one-half of Black and Latinx workers today report that they have quit a job as the result of discrimination in the workplace.
If you haven’t already, now is the time to craft a strong DEI plan and set it into motion—and get everyone on board. It’s important to ensure your management team is committed to creating a diverse workplace culture that values employees of all backgrounds and identities.
6. Hiring the Wrong People
If you’re facing challenges in employee retention, start by examining your hiring practices. It’s no secret that the employees who have worked with your organization the longest tend to also be the most productive—that’s part of why it’s so important to hire the right candidates, so they stick around longer.
Some considerations to factor into a successful hiring process are:
- Hiring someone who shares your organization’s mission, values, and vision.
- Hiring someone who will fit into your company culture. (Note: This doesn’t have to mean that they are exactly like the other members of your team—just that they are open-minded and collaborative!)
- Hiring someone who spent a fair amount of time in their previous position.
- Hiring someone excited about and committed to a role.
- Hiring someone who has the right technical skills.
- Hiring someone who is flexible, eager to learn, and has a positive outlook.
Of course, you should always seek to hire a job candidate who meets your minimum technical requirements for the position—but that doesn’t necessarily mean automatically hiring the person with the most experience. You can teach hard, technical skills, but it’s more important to hire someone who makes your team feel complete.
7. Inadequate Employee Recognition
Not getting the recognition they deserve can make employees lose motivation, eventually becoming disengaged. It may even contribute to decreased productivity. Over time, not getting recognized for their hard work or noteworthy successes can cause even committed team members to look elsewhere for employment.
Now is an important time to create a culture of recognition. This can look like rewards and acknowledgment programs, but it can also include routine feedback sessions and mentions of jobs well done. It can even be as simple as a handwritten note thanking someone for their contributions. When you celebrate achievements at any scale, your employees will feel that their work—and they themselves—are valued as part of your team.
8. Mishandling of Personal Issues
If your employees don’t know how to deal with personal issues—like an illness or some kind of challenge in their lives outside of work—or if they don’t know how to handle conflict with supervisors or other members of the team, they may feel as though your organization doesn’t care, even if that couldn’t be farther from the truth.
Clear pathways of communication to address conflict in the workplace, as well as established channels to get support for personal issues, can help your team know that even when challenges arise, your organization is there for them.
Overcoming Challenges in Employee Retention Starts by Understanding
At the end of the day, employee retention is all about taking care of your team. You achieve this by understanding what’s going on within your organization.
At Combined Resource Solutions, we take a deep dive into your company culture, conducting interviews and using the data collected to make targeted recommendations to cultivate a thriving workplace that is positive and productive—one where employees are motivated to stay.
Whatever struggles you’re facing, we’ll get to the bottom of it through our proven processes, commitment to helping you grow, and unbiased communication channels. Are you having challenges with employee retention? Let us help. Connect with our team today!