Employee turnover is increasing
Good companies are losing valuable employees.
People they’ve hired, invested in and come to depend on are moving companies in their droves for greener pastures.
If you're a leader or HR manager, this is a cause for concern.
So let’s look at what we know so far.
The Great Resignation
In November 2021, more than 4.5 million US employees resigned from their positions. Up to that point, this was the highest number on record in any given month. Anthony Klotz, a professor at Texas A&M university, called it ‘The Great Resignation’.
In the UK and Ireland, there is less evidence of a great resignation away from jobs, but more of a trend to head for the exit sign and change companies.
In the UK, a study showed that 69% of workers were intending to move jobs.
In Ireland, a recent study showed that 37% of workers plan to change jobs in 2022.
The question is, why?
Why are employees so unhappy that they’re prepared to jump ship like this?
What do they want from their careers that they’re not getting?
And do they need to take the risk of leaving a good company to find it?
Most importantly, what can companies like yours do to retain their top talent?
Why are employees leaving their jobs?
The increase in employee turnover has been attributed to the Covid-19 pandemic, with some analysts saying it’s pent-up demand.
The pandemic has become a reset button, creating a fundamental shift in our relationship with work.
Employees have gone from putting up with jobs they don’t like, to doing something about it.
The role of the Covid-19 pandemic
The Covid-19 pandemic caused an abrupt stop to just ‘turning up and getting on with it’.
The switch to working from home gave people more time to reconnect with their families, their local communities — and, most importantly, themselves.
It also gave them space to think.
Some enjoyed working from home and found it gave them more autonomy. With no commute and more flexibility in their daily routines, they were able to spend more time with their families and enjoy a better work-life balance.
It was the start of a ‘Great Reconnection’.
The Great Reconnection
During the pandemic, the world’s workers began to re-evaluate their life priorities and their relationships to their careers.
They started to think more about where they were working, how they were working and why they were working. Conversations about what was important to them and what they wanted from their careers became relevant and common.
As they took the opportunity to reflect, many employees realised they weren’t happy.
They wanted a variety of things — like meaningful work, to feel valued at work, or to have a sense of belonging. And if another company could offer them, they were prepared to move.
One of the lasting outputs of the pandemic is that we are in a new era where career wellbeing is a priority, which means having work you enjoy.
But that’s one side of the employment coin, what about the other side?
How are companies faring when it comes to keeping staff engaged and motivated?
Employee turnover is a huge cost for companies
Companies are losing valuable employees and it’s costing them.
Research by Gallup estimates that the average cost of replacing one employee can range from one-half to two times the employee’s annual salary.
Costs include recruitment advertising, training expenses, time spent and role downtime.
Depending on the role, it can take 6–12 months for a new employee to become proficient and perform at the required level — and that’s if they stay that long.
These are costs that companies clearly want to mitigate.
In a survey by Kronos, 87% of leaders said employee retention was one of their highest priorities.
Many companies will use employee retention strategies in an attempt to stop their employees from leaving.
But these are often too broad.
Let's look at this in more detail.
Employee Retention Strategies
Here are two of the retention strategies companies commonly use.
Employee wellbeing initiatives
Employee wellbeing aims to make improvements in a number of areas, including the individual employee’s:
- Physical health
- Mental and emotional health
- Happiness and contentment
- Job satisfaction
- Stress levels
Employee engagement strategies
Gallup’s State of the Global Workplace 2021 Report revealed that only 21% of employees are engaged at work.
The other 80% are either not engaged or actively disengaged at work, which is costing the global economy US$8.1 trillion each year in lost productivity.
Employee engagement is now more challenging than ever, because workplaces are constantly changing, causing burnout, stress and overwhelm.
Research by Ceridian reveals that 79% of UK workers have experienced burnout, with 35% reporting high or extreme levels. And this can make even the most loyal employee question whether they should leave a company.
To address this, companies have used a range of employee engagement strategies, such as:
- Recognising achievements
- Encouraging feedback
- Listening to concerns
- Sharing ideas and successes
- Creating a culture of respect.
Why some employee retention strategies fall short
While employee retention strategies work on one level they often fall short.
Giving extra money, moving to a 4-day week and flexible hours are all welcome but they have become the norm.
And for key people, this may not be enough.
These strategies don’t acknowledge that careers are changing — and that they’re complex and unique to each individual.
Retention strategies are often based on what companies think their employees want, rather than what their employees actually want.
Let me explain.
The Great Disconnect
Research by McKinsey & Company shows a clear disconnect between why companies think their employees are leaving their jobs and why they’re actually leaving.
Why companies think their employees are leaving.
The top 6 reasons companies think their employers are leaving are:
- Inadequate pay
- Poor health
- Better job
- More development opportunities
- Ability to work remotely
- Poached by another company.
Why employees are actually leaving their jobs
The top 6 reasons employees are actually leaving are because they:
- Don’t feel valued by the organisation
- Don’t feel valued by their manager
- Have no sense of belonging
- Have no potential to advance
- Don’t have caring and trusting team mates
- Don’t have a flexible enough work schedule.
But while these are common wants, they mean different things to different people.
For example, people feel valued in different ways. One person might see it as getting recognition and appreciation for their efforts. Another might see it as being trusted and having more freedom. Another might see it as being given an opportunity for training and development.
How to avoid losing good employees
To hold on to good talent, I recommend a strategy that suits your employees’ unique needs.
As well as pay, benefits and wellbeing initiatives, consider the following actions to support retention:
- ENGAGEMENT: Focus on individual employee’s career wellbeing. Work with those who are struggling and identify improvements to create greater job satisfaction and engagement
- SELF-LEADERSHIP & GROWTH: Maximise opportunities for career development and progression, so people can continue to learn, grow and develop as an individual
- LIFESTYLE & BALANCE: Allow flexibility to accommodate individual preferences, working with employees to manage workload and create greater work-life balance
- PEOPLE CONNECTIONS: Work with managers to foster meaningful relationships, so employees feel a sense of connection and belonging at work
- UNIQUE STRENGTHS: Cater to employees’ unique strengths and help them use those strengths.
What if your next great hire is someone who’s already working for you, but who hasn’t yet reached their potential? They might be in the wrong department or doing the wrong job.
Successful managers go deep. They develop their key staff, understand their values and give them the support they need to make it a reality.
The case for improving career wellbeing and engagement
Leading organisations that focus on being a great place to work and improving career wellbeing, see the results.
People who have healthy career wellbeing:
- Thrive in their jobs and careers
- Have higher levels of energy
- Are engaged and interested in their work
- Enjoy higher performance and achieve their potential
- Have better relationships at work
- Have clearer goals and ambitions
- Become more adaptable and better learners.
These employees are highly engaged and achieve higher performance. The organisations they work for become a magnet for top talent.
Employees who have healthy career wellbeing enjoy their work and stay with their companies for longer.
3 ways to help staff feel valued
The more your employees can align their jobs with their individual goals, aspirations and needs, the happier and more productive they will be.
Here are three ways you can support them:
1. Treat everyone how they would like to be treated
The old way to manage your staff was to treat them how you would like to be treated.
In the book ‘CEO Excellence', Scott Keller tells us this has now changed to treating them as they would like to be treated.
This is an acknowledgement that everyone has different values, motivations and needs.
Work with your staff to understand their individual strengths, values and needs. Match them to tasks and projects that complement their abilities and bring out the best in them.
2. Help employees play to their strengths
In his book ‘Love+Work’, Marcus Buckingham puts forward the idea of ‘red threads’. These are strengthening tasks and activities that employees love doing and want to do more.
You can help your employees play to their strengths by giving them the freedom and opportunity to work on their red threads more often.
This will allow them to craft their job. They can focus on what drives their positive energy, where they feel most successful and where they want to develop.
3. Help employees find more meaning in their work
Employees want work that’s meaningful and where they feel they’re making a difference. Meaning is subjective and is different for each individual, but what’s clear is that employees want to belong and feel valued.
You can achieve this by helping your managers to support the employees they’re managing. A good manager will help employees to see the positive impact they’re making, so their work has more meaning.
We are now in a post-pandemic era, where employees want more enjoyable work and wellbeing is a priority.
Focusing on the career wellbeing of individual employees is a win-win, because when you unleash the career potential of your employees, you retain your best talent and unleash your potential as a company.
In my experience, you can transform your employees’ wellbeing by looking beyond generic solutions and focusing on what each individual needs.
The more valued an employee feels, the more of a value-add they are to your company.
Does your business want to increase employee wellbeing and retention?
If your company is looking to improve employee engagement and retention, maybe I can help.
I’m Terry O’Brien, a certified career and leadership coach and creator of CareerWell Leadership. I work with individuals and organisations, to improve the career wellbeing, engagement and performance of key employees.