By: Kelly Wilmott
Hiring new staff is important for business growth, but it’s just as important, if not more so, to invest in your current team. Replacing an employee can cost employers about 33% of an employee’s salary (Indeed) but overall costs associated with turnover can range from 90 – 200% (SHRM). Turnover is costly and your employee retention rate will seriously affect your company’s overall success and productivity.
The current job market hasn’t been making it easy for business owners to attract and hire top talent. If it’s not the vast amount of open roles they have to compete with, they also have to worry about good employees leaving for other opportunities made available to them.
So how do you prevent your employees from jumping ship?
Before offering up solutions, let’s take a look at some of the main reasons someone wants to jump ship in the first place:
Seeking a Higher Pay/Better Compensation
A low salary and/or a poor benefits package are two of the biggest reasons for an employee to seek another position elsewhere.
63% of employees who left their jobs in 2021, claimed low pay as the reason (Pew Research Center data) and according to the SHRM, 88% of employees take better health, dental, and vision insurance benefits into serious consideration. With the rise in inflation, employees are on the lookout for better pay and improved benefits so they can afford to live comfortably and support any lifestyle changes they may have had.
SOLUTION: Conduct regular compensation reviews and ensure that your employee’s pay and benefits are in line with industry standards and competing businesses in your area. Employees should feel comfortable enough to ask for a raise and be able to negotiate it accordingly.
We understand that higher pay isn’t always possible, so if that’s the case, what other incentives can you offer to sweeten the deal? Offering a compensation package that employees find difficult to refuse is a great way to not only attract top talent but also ensure that your current staff feel motivated and valued for the hard work they do.
No Advancement Opportunities
A recent study by Workplace Intelligence & Amazon found that 74% of Millennial and Gen Z employees are likely to quit within the next year due to a lack of skills development opportunities, and a study by Blind found that the happiest employees were the ones who felt they had significant growth opportunities. This is huge! Employees want to see a future with you. They want to work for a company that supports their long-term career goals so having the opportunity for them to learn, develop their skills, and grow their careers is going to be a great advantage to you.
SOLUTION: Ensure there is ample room to grow and hone your employee’s skill sets by giving them access to educational programs, such as webinars, professional courses, workshops, and conferences. If there are opportunities for career advancement or promotions, let them know it’s on the table and what they need to do to be considered.
Lack of flexibility/Desire to work remotely
One of the biggest trends, spurred on exponentially by the pandemic, is employees wanting more flexibility, especially work-from-home flexibility. Work-life balance, family/childcare, time savings, and commuter stress are among the top reasons for seeking flexible work, but there are also huge benefits to the employer.
Work-from-home flexibility is still a hot topic for discussion, but one thing is for sure, it’s not going away. A recent survey by FlexJobs claimed that 82% of respondents would be more dedicated to an employer if they had flexible work options. Also, Gallup found that 37% of workers would quit their current role for a job that allowed them to work remotely (even if it was just part-time). Flexibility can look different to each company but it’s important to offer some kind of flexibility to prevent employees from looking for it elsewhere.
SOLUTION: What does flexibility mean to you? This could mean flexible working schedules, compressed work weeks, remote work locations, or even unlimited paid time off. Remember, if you do allow your employees to work from home, implement a work-from-home policy so your company expectations are set from the get-go. And don’t forget, by giving your employees this level of flexibility, you’re showing them you can trust them to do their job and in turn, you’re building their loyalty to you.
Check out these two IdealTraits blog posts: Remote Work – Interview with Kevin Mlynarek and 3 Benefits for Hiring Remote Employees for more information on the remote workspace.
Company culture plays a huge role in the employee’s day-to-day experience.
The Society of Human Resources Management estimates that 1 in 5 employees have left a role at some point in their career because of a toxic culture, so any signs of this will have employees running for the door. Some factors that contribute to a negative work environment include low morale, interpersonal drama, poor communication, poor management or leadership, and a lack of support. Therefore, it’s important to establish a positive, welcoming work environment.
Employees want careers that fit with their core values, attitudes, and beliefs and will actively seek out roles that match. Good company culture will have a positive impact on your business, not just in employee retention but also in employee engagement, after all, positivity breeds productivity! I mean, if your team is excited to come to work every day, they’re going to be more committed to working hard and staying loyal to your team, right?
SOLUTION: Communicate effectively with your staff and ensure you live by the core values of your company. Find out how your employees are feeling by having them take regular surveys (anonymously) so if there are any issues you can address them in the appropriate manner.
The cost of hiring, training, and replacing employees can add up. Creating a positive work culture, having scope for growth and development, offering a flexible work-life balance, and being open to pay discussions will all help your employees feel valued and appreciated.
And finally, employees who love coming to work and who love the camaraderie of the team are going to be more productive, more loyal, more willing to recommend you to their friends (think: referrals and even business opportunities), but most importantly, they are much less likely to jump ship!