by Isaac Chan & Mandy Hale
Gone are the days when employees work for the same employer in the same role for many years. The average New Zealand staff turnover rate in 2018 was 20.5% (the highest rate since 2008). Our current employment landscape sees employees chopping and changing roles to suit their lifestyle and career aspirations. In the last financial year, some industries reported staff turnover rates higher than 50% (Agriculture, Non-profit, some professional services). Meanwhile, Millennials, who by 2020 will make up most of our workforces, do not intend to stay with companies for longer than two years.
Tenured employees are of greater value to your business than a constant stream of new employees, weaving their way in and out of the company. Why? Organisations with better staff retention rates develop a greater knowledge base of your practices and procedures, your company values and specialised knowledge of your customers and clients.
Employees are leaving more often than they are staying. Why?
From the flexibility to support personal/carer’s responsibilities to a clearer path to career progression, there are countless reasons why your people are resigning and heading to a business that they see as suiting their needs more. The four most common reasons for leaving a company in New Zealand are reported to be because of family or personal circumstances, promotion opportunities, salary or benefit increases or relocation/retirement.
To make matters worse, new technologies being used by recruitment professionals and platforms such as LinkedIn, are making it more common than ever for your employees to be poached by another employer. A recent study showed that an “active” LinkedIn user with up-to-date profile information receives between 1 and 4 job opportunities/offers per month on the platform.
Losing experienced employees costs you more than money
Losing an existing employee (especially a long-standing, experienced and highly skilled worker) and onboarding someone new involves many resourcing costs for your business, including:
- Recruitment costs (advertising the role and recruitment consultant fees/internal resource time).
- Other staff member’s time spent on training new employees
- Reduced/lost productivity of a new employee as they “learn the ropes”.
- Reduced engagement/morale of existing employees. It can be unsettling for current employees when there are frequent departures, and this is rarely offset by the excitement of a new face.
- Cost of errors –inevitably new and inexperienced employees will make more errors in their early stages.
Luckily, retention isn’t rocket science
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Retaining staff isn’t rocket science, you just need to know where to start and what to focus on.
If you’re haemorrhaging time and money trying to fill the seats and roles left by valuable employees, there are five areas I recommend you focus on as part of your strategy to increase employee retention:
- Recruitment. An important question to ask yourself is, “Are you recruiting the right people in the first place?” Retention can be set to fail from the start if you have not put the time into vetting candidates to ensure their skills match the role and they fit with the culture and values of your team and your people. To Google’s Staff Manager, Jeff Moore, prioritising culture-fit in a hiring strategy is the key to long-term employee retention.
- Employee benefits. These days, what companies can offer employees to be competitive reaches far beyond salary. From flexible work conditions to allowances, insurance packages, stock options, and other financial rewards, you can present a competitive range of benefits that will have a significant impact on keeping your employees engaged and happy.
- Healthy working spaces. If your people don’t feel safe and comfortable at work it’s easier for other companies to entice them away with the promise of a more social, more relaxed, more modern place of work. A recent Forbes article looked at the impact of the physical work environment on employees. 93% of workers in the tech industry in the United States said they would stay longer at a company that would offer healthier workspace benefits including sit stands and ergonomic seating. A healthy workplace should also have a healthy culture. Employees who rate their workplace culture poorly are 24% more likely to leave an organisation within a year.
- Pro-active learning and development opportunities. According to HR Technologist, “training is the key to employee engagement and retention because today’s employees seek personal growth and development in the workplace.” LinkedIn’s 2018 Workforce Learning Report states that 93% of employees would stay at a company longer if it invested in their careers. But how can you be pro-active about creating the right continuous learning paths for your people? You should be encouraging your managers and team leaders to actively pay attention, in performance reviews and one-on-one discussions, to what motivates your people, what interests them, and where they see their careers leading. By actively listening to your employees, you’re better able to provide learning and career opportunities that will keep your workers engaged, driven and loyal. And you can never have too many discussions with your people!
- Employee recognition. The Society of Human Resource Management (SHRM) found that organisational employee recognition strategies are growing as part of an effort to improve retention rates. When you recognise and express appreciation for work that your employees are doing, you’re confirming that they’re a valuable part of your organisation. Failing to recognise the hard work and accomplishments of your people, puts their productivity and job satisfaction at risk and gives them little incentive to stick around. Research by TinyPulse found that 21.5% of employees that don’t feel recognized when they do great work have interviewed for a new job in the last three months, compared to just 12.4% that do feel recognised. A bit of recognition for your employees’ achievements, big or small, can go a long way.
Be the business that no one wants to leave
It can put your business under significant strain when talented and experienced employees resign, leaving you to fill the empty desk and the knowledge gap that they’ve left behind. Filling the boots of a great employee is tough. Finding a talented replacement in today’s competitive talent market makes it even tougher.
Investing in retaining your awesome employees, rather than spending on recruiting new ones, can benefit your organisation in more ways than just saving costs. By focusing on the right areas as part of your retention strategy, you can help your business boost performance, productivity, and morale across your workforce as well.
While not exclusive, focussing on the five key areas I’ve highlighted above can help you to improve staff retention. By focusing on these top tips for retention, you’ll be well on your way to being one of those companies that everyone wants to work for, and no one wants to leave.
At HR Assured we understand the difficulties associated with staff retention. Have you been working on your retention strategy lately? Did you find these tips helpful, or do you have your own to share? We’d love to hear from you so drop us a note at email@example.com