Nowadays, workers want to work for companies that value their time and effort in making a difference. From my experience, I can say that it’s natural for them. However, for employers, we need to step up our game. Without a doubt, employers need to improve employee retention in the long run.
Employee retention initiatives are important to boost engagement and improve performance in any field. For instance, it attracts and retains key employees to reduce turnover. It contributes to a company’s productivity and overall performance. Studies from Society for Human Resource Management (SHRM) states that job satisfaction and engagement are key factors for retention. The more invested employees are, the more likely they will remain with the company.
Let’s dive into employee retention. We will discuss its importance to improve performance and build better employee relationships.
Why Employee Retention Is Important
Employee retention is important because it saves a company’s productivity losses and turnover expenses. According to Work Institute, employee replacement costs from one-third to double of a longtime employee’s annual salary. Society for Human Resource Management estimates that it costs $20,000 to $30,000 in recruiting costs and training expenses to cover costs.
Reasons Why Employees Leave
Why do employees quit? There are many reasons why employees quit, such as not providing input, low motivation, doing the bare minimum, etc. Fortunately, there are ways to address employees’ concerns about their performance. The key aspect is to address these problems as soon as possible before it’s too late.
Knowing why employees leave can help you spot what your organisation is lacking. It will help you understand employees better. Here are the most common reasons why employees leave.
- Better alternatives – Employees may find a better workplace while working. If the current company does not offer competitive benefits, an ideal work environment, or external deals, it becomes a reason for employees to leave.
- Planned changes – There are external factors that cause employees to resign. Most of these are affected by life changes. TrustRecruit states poor work-life balance among 1 in 4 Singaporean workers is one of many reasons to leave. Some employees may have predetermined plans, such as caring for pregnant spouses or personal matters. However, if management (and, even better, the government) address family concerns by providing incentives and policies such as generous parental leave and family-friendly benefits, it can help address employee retention.
- Negative experiences – Employees may leave on impulse due to negative and traumatic experiences they incurred. Some of them include long working hours and rendering underpaid overtime. You can provide an internal discussion to minimise negative interactions between employees and departments.
- Lack of feedback – On the other hand, other employees leave their companies due to lack of growth. For others, this means that they have felt they have outgrown their workplace. Meanwhile, for some, this can also mean a lack of feedback between the employee and their direct supervisor. One way to address this is to provide a training plan for employees. Another way to do it is to provide more growth opportunities for employees, such as assigning them higher-level tasks and investing in their skill training.
- Low motivation – Employees feel low motivation because they feel unsatisfied. In comparison, it shows between the manager and the employee’s relationship.
Strategies To Improve Long-Term Employee Retention
In addition to these costs, a high turnover rate impacts the workers involved by low morale and decreased productivity. The best way to improve employee retention is by directly addressing it. Here are some strategies that will help cultivate long-term employee retention:
Recognise Employee’s Contributions
A lack of recognition for the hard work you put in is a glaring reason why most employees resign. One way to address it in the workplace is to recognise your employee’s contribution. When employees feel recognised, they are 56% less likely to find more opportunities as stated by a 2022 Galup/Workhuman survey. According to the same survey, 19% of employees can identify with and recognise the recognition culture. Remember, recognition is a two-way street: you need to go the extra mile so that your efforts can be acknowledged.
Due to inflation and the rising costs of living, more people opt to find greener pastures to find jobs that can help them stay afloat. This boils down to finding adequate compensation. Compensation is a big factor in long-term employee retention.
Focus On Flexibility
Today, remote working has become a popular work setup. When the pandemic hit in 2020, many employees (me included), found themselves working from a desk inside the comfort of their homes. At first, it was a new experience. We surprisingly got used to it since it became part of our routines. It also taught plenty of employees the importance of flexibility when working – as well as adaptability.
Thanks to the work-from-home setup, more employees are now finding ways to make the most of their time and achieve work-life balance.
When you provide work flexibility, you let employees have the opportunity to accomplish work-life balance. Moreover, you also allow employees to control how they want to work and provide their best performance.
Improve Employee Relations With The Mental Rockstar Program!
There are many reasons why employees leave companies. Some of them are unplanned, such as life changes and traumatic experiences. However, there are some issues, such as low motivation and lack of feedback, that can be communicated and discussed between employees and management. It can also prevent employee turnover.
Employee retention is a long-term responsibility. You have to continuously communicate, understand, and hear employees’ concerns to further improve productivity to address it.
Ultimately, employee retention is a two-way street for employees and employers.
The Mental Rockstar Program is for companies aiming to help employee retention and company culture. Led by YuJin, an award-winning mental toughness coach, former lawyer, and investment banker, he provides deep discussions to improve performance. Contact Mental Rockstar now to improve the workplace!