Is your company doing everything possible to increase employee retention? It’s estimated that employee turnover is up across the board, with 1 in 3 hiring managers in the U.S. reporting that they think turnover will rise in 2024 for all kinds of reasons, including:
- Better opportunities for higher pay and benefits with other organizations (38%)
- Rising demands in the workplace (35%)
- Dealing with the repercussions of other employees resigning (33%)
- Employees feeling overworked (31%)
- Seeking opportunities in a competitive job market (26%)
To counteract this, now is the time to zero in on employee retention, or rather, the rate at which your organization can keep high-performing employees on your roster. Typically, this figure is expressed as a percentage, and the higher your retention rate, the better.
Perhaps the best way to illustrate the importance of cultivating a high staff retention rate is to consider the impact of a low retention rate. With low retention rates come issues of growing costs to recruit, hire, and onboard new employees, dissatisfied customers, plummeting employee morale, and overworked employees—all of which, in turn, will only continue to negatively impact your retention rates.
Boosting your retention, on the other hand, can have hugely positive effects on employee engagement and morale, customer satisfaction, profits, productivity, and company culture. Here’s what you need to know about curating the right environment to set the stage for high workforce retention rates.
The State of Employee Retention in a Tenuous Job Market
It’s estimated that 81 percent of today’s executives and key decision-makers have concerns about losing their top-performing employees.
Perhaps that’s because they’re taking note of the current job market. We’ve passed the height of the Great Resignation trending in headlines in 2022, when 4.5 million employees, or 3 percent of the country’s workers, were quitting their jobs every month. Even so, it seems that the number of people choosing to leave their jobs has actually risen since this time:
- 46 percent of professionals are considering leaving their job in 2024, compared to 40 percent in 2021
- LinkedIn has experienced a 14 percent average increase in total job applications for each posted job opening
- 85 percent of U.S. workers plan to look for a new job role or new position in 2024
What’s the main reason for the uptick in American workers looking for new jobs? Inflation. In fact, 45 percent of those workers planning to look for a new job in 2024 report that the reason behind their search has everything to do with needing a higher income, and those switching jobs for better pay are more likely to increase their salaries than the workers who opt to stay working their current job.
In other words, employees are more likely now than they have been in recent years to leave their current jobs in search of something better—which means there has never been a more critical time for employers to focus their efforts on boosting retention.
Companies that work to reduce employee turnover and improve retention rates experience all kinds of advantages, especially when it comes to operating in today’s complicated hiring environment. They are more likely to meet (or exceed!) their business goals and even recruit stronger new hires. After all, high retention rates speak well to a company’s ability to take care of its employees. Moreover, companies with strong staff retention don’t have to manage the challenges and constant disruption associated with the high employee turnover rates that many organizations are dealing with today.
How to Encourage Worker Retention
Strong employee retention rates don’t happen by accident; they must be developed thoughtfully and intentionally by creating a positive, supportive company culture, and discovering—then addressing—the things that employees most want and need.
So, how do you boost retention rates? Here are a few strategies that can give your organization a competitive advantage:
Focus on Company Culture
The first step toward improving workforce retention is to create a culture where your people thrive. Today, 77 percent of prospective employees will research an organization’s company culture before they apply. Your company culture is all about the values, attitudes, and operational practices you, as a business, work from. It’s your organization’s story, and while it may start with a mission or values statement, it’s more than just words on your website; it’s woven into your operations day in and day out.
A positive company culture is one in which your team feels safe, appreciated, heard, engaged, supported, and motivated. The most important way you can encourage a positive company culture? Respect. Employees rate feeling respected as almost 18 times more important than any other factor in how they evaluate an organization’s company culture.
Take a Vested Interest in Your Team
The employees that power your business are more than just employees—they’re people! And while that might sound obvious, your interest in your team as people first might not always translate fully. That’s why it’s so essential for you and your managers to take the time to get to know—and show real interest in—who your employees are and what their personal aspirations might be.
Why is this important? Designating time to check in with your team about their interests and goals doesn’t detract from their productivity—it can actually enhance it. It reinforces your team members as individuals, fosters a sense of belonging, and makes people understand that they matter to you as more than “just a worker.” When you get to know your team, they’ll feel more engaged and supported and will be far more likely to stay with your organization.
Engage Your Team In Your Organization’s Goals
What are your business’s values? What’s your mission? While you may feel closely attuned to these goals, your employees might not be able to see the same connection to them unless you allow them to take an active role. Without this connection, they might not feel as engaged or invested in your company’s work. That’s why it’s so essential to invite your employees to contribute; so they feel they too have “skin in the game.”
One way to do this is to shine a spotlight on team members who are taking your company’s purpose to heart. This not only celebrates an individual’s achievements, but it also serves as a reminder to the rest of your team about why you do what you do and about what makes working for your organization so special.
Evaluate the Company-Wide Perception of Leadership
Do you know how your business’s leaders are perceived by the rest of the organization? Recent polling suggests that over half of American workers have quit their jobs and left companies as a result of poor leadership. Perhaps you’ve heard the saying that goes, “People don’t quit jobs, they quit managers,” and that’s never been more true than in today’s job market in which morale and respect are so valued among employees.
Now is the time to be mindful of how your organization’s leadership is perceived. Take a thorough look at your employees’ perception of your management team through either a Culture Survey or Leadership 360 Surveys. Upon completion of either type of survey, you must make transparent changes correlated to the survey results to demonstrate to your employees how much you value their insights.
Establish Career Paths and Documented Training For Employees to Advance
When a new hire on-boards with your company, chances are high they want to know the path for advancement so they can picture themselves staying with your organization for years. This means there needs to be room for advancement. Having a clear path toward career advancement is one of the most significant ways you can retain employees.
In fact, 63 percent of respondents who left a job in 2021 stated that one of their main factors in leaving their positions was a lack of opportunity for advancement. This was echoed in 2022 when a separate study found that lack of career development and/or lack of potential for career advancement ranked as the primary reason why employees quit their jobs.
So how do you go about nurturing retention through career development?
- Make pathways for internal career advancement clear and visible
- Offer opportunities for learning and professional development, including hands-on experience
- Provide helpful, actionable feedback and coaching to help employees feel you have a vested interest in their growth
- If an internal candidate is passed over for a promotion, provide them with honest feedback and support to improve in the skills they lacked
Gauge Employee Sentiment Regularly
How do your employees feel about working for your company? Tools like engagement surveys, stay interviews, roadshows, and focus groups help you take the pulse of your entire organization.
Assessing your company’s employee sentiment is a way to gauge the well-being of your entire business. The results of these studies help you understand the factors impacting workplace productivity and culture, job satisfaction, and employee engagement. It also empowers you to discover what proactive steps you can take to improve.
It’s essential to take time to gauge employee sentiment because:
- It provides clear insights into employee satisfaction
- It identifies opportunities for growth and improvement in workplace culture
- It allows you to better predict retention and turnover
- It helps inform your HR policies and practices
- It establishes a culture of transparency and trust in your team
Recognize and Reward Your Employees
More than ever before, your employees want to know that their individual contributions are seen and valued. Of course, employee recognition can—and absolutely should—include competitive compensation, as there is a direct correlation between competitive compensation and increased retention:
- Increasing pay for warehouse workers by $1 per hour amounted to a 2.8 percent increase in retention
- A $1 per hour decrease in pay leads to a 28 percent average increase in turnover
- 55 percent of workers today will leave a position to take a job at another company if it means better compensation
However, employee recognition should include showing appreciation through more personal approaches as well. This can include celebrating exemplary performance in a public setting like a company meeting, offering rewards for a job well done, or even sending a handwritten, personalized thank-you note. Taking the time to show your appreciation does not have to be complicated, but can make all the difference when it comes to how your employees feel about being part of your team.
Get Invaluable Employee Retention Insights with CRS
Staff retention doesn’t happen automatically. It must be an ongoing priority if you want to ensure that your company is a place where employees want to be—especially if you want them to stay.
With the right insights, you can cultivate a workplace that is positive and productive, and where the long-term tenure of your team contributes to their personal successes as much as it does your organizational goals.
Of course, you’ll have some employees leave sooner than you’d like, but by gauging employee sentiment through intentionally crafted surveys, interviews, and focus groups, you can get the actionable data you need to enhance talent retention—and experience all the positives that come along with that.
Are you ready to discover how boosting your organization’s retention can benefit every aspect of your company? Contact us today to learn more about retaining your company’s top talent.