The current UK unemployment rate of 4.0% has not been this low since the 1970’s. Yet, interestingly a recent study by XpertHr claimed that employee resignations are at a five-year high of 15.5%. The impact of employee turnover is often overlooked. However, losing a key employee can affect team morale, can cost organisations significantly to source and train a replacement and ultimately results in a loss of experience and knowledge from the departing employee.
It is fundamental that employers tackle the factors which result in their employees looking for new roles and resigning. There are a number of factors that contribute to employee turnover and if they are addressed adequately, they can assist with staff retention. We have identified these key steps can help employers retain their employees.
1. Management Training
It is often quoted that ‘employees do not leave their organisation; they leave their manager’. The relationship between a manager and subordinates is key. Training should be provided to managers in order for them to efficiently manage their team, keeping employees engaged and motivated.
2. Professional Development
Employees value working for an employer who invests in their future via professional development. This demonstrates to the employee the value the organisation places on them concerning their present and future career growth. Not only will this development positively influence the output of work produced but also positively affect the psychological contract (the mutual beliefs and perceptions between employer and employee of what each other expects) between the parties in the employment relationship.
Organisations should actively listen to their employees. Staff forums and committees are a very good way of giving employees a voice and letting them influence organisational decisions. A lot of value is placed on this two-way form of communication between employee and organisation. However, the organisation has to prove to the employees that they are being listened to and if feasible, implementing their ideas too.
By granting employees a voice, it becomes easier to understand them, since baby boomers and millennials may be motivated and engaged by different factors. A recent study by Forbes highlighted this difference by claiming baby boomers seek job security and flexibility while millennials seek organisations that positively impact society and one that can offer them job and career enrichment. This highlights the challenge organisations face in engaging employees who seek different things.
In addition, it’s important for managers to have meaningful conversations with their employees to judge their workload and work-life balance. An overworked employee may lose focus, drive, and eventually seek new employment. Organisations have to discover what motivates and engages their employees in order to retain them. An employee will not look to leave if they are happy and all their needs are fulfilled, but these needs will change over time so it is important for the organisation to be adaptive to these needs.
4. A well-rounded benefits and salary package
Finally, organisations should seek to offer a benefits package that their employees want. The approach should be ‘best-fit’ rather than ‘best-practice’ as offering employees what they want will strengthen engagement levels. Designing a total reward package that is strategic in nature and designed on long-term reward policies and practices will not only advance the organisations objectives but also the employee motivation.
A recent report by the Bank of England claimed that employees who switched employers would receive a salary increase of just under 8% on average whereas those who stayed with the same employer received significantly lower salary increases highlighting the need for organisations to carry out regular benchmarking exercises to ensure they are paying competitive market rate salaries.
For more information or advice on how to improve your organisation's employee retention get in touch.