Are your employees leaving the workforce or switching jobs? If so, it’s not good news for your organisation. Workers who move on affect the productivity and the bottom line of your business.
With experts predicting that the tide is unlikely to turn anytime soon, HR professionals need to be aware of the strategies they can adopt to mitigate employee turnover.
Here, we look at how organisations can retain their talent in the months ahead.
The Great Resignation
The Great Resignation was a phrase coined by the organisational behaviour professor Anthony C. Klotz in 2021 during the chaos and uncertainty of Covid-19.
Two years on with the pandemic waning in most countries, workers are still quitting at alarming rates across the western world, a trend which is creating major recruitment problems for employers. How can businesses stop the tide?
What is employee turnover?
According to the CIPD, employee turnover ‘refers to the proportion of workers who leave an organisation over a set period.’ The term is expressed as a percentage of total workforce numbers and is used to cover all leavers including those who resign, retire, or are made redundant.
For example, an organisation that has 140 staff on its payroll saw 36 people leave in the previous year - 28 resigned, three failed their probation, three retired and two were dismissed - which equates to an employee turnover rate of 26%.
Employers can calculate more specific breakdowns of turnover data, such as resignation levels which are useful in assessing the effectiveness of people management practices.
Why does employee turnover matter?
To put it simply, employee turnover matters because it costs organisations money.
Retaining employees means retaining relevant knowledge and skills, and avoiding the investment in time and money that is required to recruit, onboard and train new staff.
Aside from the cost of recruitment and training, there is also the impact that high staff turnover can have on morale.
Seeing a regular flow of colleagues – and friends – leaving can impact on those who remain, which in turn can impact on their performance and productivity.
If you are in a small team and see two or three of your long-time colleagues leave, while being asked to train up their replacements, there’s a good chance your motivation will drop.
The good news though is that employee turnover can be controlled when the right strategies are in place.
Why are people resigning?
The number of people quitting their jobs has exploded in recent years. In the UK, companies and the public sector are wresting with a chronic shortage of workers, which the Bank of England has said is harming the economy.
A LinkedIn survey at the start of the year found that 61% of US workers were considering leaving their jobs in 2023 with numbers higher (72%) among Gen Z employees.
Despite fears of a global recession, the Great Resignation does not seem to be over yet.
So, why are people, particularly younger workers, so eager to leave their jobs? Interestingly, it’s not always about the money.
Experts believe that while the global health crisis caused a shift in workers’ priorities, the desire to quit employment was set in motion in the years before the pandemic.
“Quit rates have been steadily increasing over the past 10 years,” says Kristie McAlpine, Professor of Management at Rutgers University School of Business in the US. Low wages, discontent and burnout are some of the factors which have ‘been bubbling over the past decade or more, and the pandemic really just put a magnifying glass over it all,” she adds.
McAlpine also believes the situation is unlikely to improve quickly, a view echoed in the UK by Anthony C Klotz, Associate Professor of Management at the UCL School of Management.
In addition to the original reasons for leaving the workforce, we are seeing large swaths of employees move around the job market or change careers altogether, he explains.
The implication of these trends is clear. Employees are re-evaluating their relationships with employers and many are not liking what they see.
In such turbulent times, people professionals need to act fast before a turnover wave comes crashing into their organisation. Here are some strategies that can help mitigate employee turnover.
How people professionals can stop the Great Resignation
Hire the right people
The first step in reducing turnover is to hire employees who are a good fit for your organisation. This includes not only assessing their skills and qualifications but also their personality, work ethic, and cultural fit.
During the interview process, find new ways to understand how a person thinks. Challenge your candidates so they are more likely to display their true selves. Involve other team members who will work with the recruit as their opinion matters.
Improve onboarding and professional development opportunities
Do your new hires feel welcomed and supported from day one? If not, then it’s time to overhaul your onboarding processes. Onboarding can make or break a new team member’s experience of your company.
As an HR professional, it is your job to put employees at their ease so they can adjust quickly to their new physical and social environments. Some tips for successful integration include:
Provide information on the role and their team before they start.
Structure the onboarding period carefully to include time for regular check-ins.
Introduce them to the company’s values and mission statement.
Convey clear job expectations and performance goals.
Match new recruits with a ‘buddy’ or offer mentorship opportunities.
Learning and professional development programmes should be ongoing to help your workers build new skills and enhance their existing ones.
Apprenticeships are a great way of developing your workers and retaining them in the business.
A survey by Reed found that 64% of apprentices remained with the same employer after completing their programme. Investing in your people demonstrates a commitment to their future, creating a sense of loyalty and engagement in return.
Foster a positive work environment
Provide a positive work environment as your employees are more likely to remain with the business if they feel appreciated and valued. Foster a culture that values open communication, teamwork, and well-being among your workers. Encourage regular feedback, listen to their concerns, and address issues promptly.
Implement policies that promote work-life balance, offer competitive financial and benefits packages, and provide opportunities for professional growth and development.
Creating a positive work environment is not only essential for our own professional growth but also for business success.
Enhance employee engagement
Engaged employees are more likely to stay put rather than walk out of the door.
Encourage a sense of purpose and engagement by involving your workers in decision-making processes.
Make work feel personal by learning about your employees, their interests and families.
Recognise their achievements and provide opportunities for autonomy and ownership.
Use company-wide projects to encourage teamwork and collaboration.
Employee engagement is likely to fluctuate over time for many different reasons. Don’t forget to regularly assess employee satisfaction through surveys or feedback sessions to identify areas for improvement.
Reward your people
Pay and benefits are important to attract, retain and engage your workers, particularly your top talent. Conduct regular market research to ensure that your compensation packages remain competitive.
Evaluate salaries, bonuses and benefits offered to employees, ensuring they align with industry standards. Some workers prefer flexible work arrangements, wellness programmes and opportunities for advancement over monetary rewards.
Other benefits valued by employees include health insurance and options to take unpaid leave.
Promote a healthy work-life balance
There is clear evidence that ‘good’ work improves health and wellbeing across people’s lives, not only from an economic point of view but also in terms of quality of life.
Employees value a healthy work-life balance and organisations that prioritise this often experience lower turnover rates. Offer flexible work options such as allowing your employees to work remotely. Support a culture that respects personal time and makes it easy for people to consider cycling or walking to work.
Offer incentives for people to exercise regularly, perhaps a gym membership, or a get together in the park to play sport.
Employees must decide for themselves whether they will take advantage of health and wellbeing options but a major consideration in their decision is how their work-life balance will affect their career.
Business leaders have a role to play and should provide their workers with a definition of what work-life balance means in their organisation.
Get your performance management strategy right
Managing the workforce has always been an important function of HR. Done well, it can help attract, develop and retain your people. Done badly, it can lead to disengagement, unhappiness, and ultimately higher numbers of leavers.
An effective performance management system provides workers with regular feedback, goal setting and opportunities for growth. Suggestions include:
Ensure your teams receive constructive feedback on their work.
Recognise and reward exceptional performance and provide opportunities for career development through coaching and professional development.
Regular performance evaluations can help identify areas of improvement and address concerns before they become reasons for leaving the business.
Be creative about employee retention
Managers and team leaders are key to building an effective retention strategy. Investing in leadership development programmes is essential to ensure your leaders have the necessary skills to motivate their teams and achieve success.
This doesn’t have to involve large-scale outsourced programmes but does require some intentional thought and effort. It could be as simple as an internal mentoring scheme to begin with or buying a suitable reference book.
One way or another, you need to decide how you are going to support and develop your managers.
However, improved team performance creates a quandary for managers who, understandably, want to keep the best people to achieve the best results. This can be detrimental to an individual’s career development or an organisation’s ability to access the talent across the business.
The outcome is that the very people you want to retain, leave the company.
The solution is to take a fresh look at how retention is managed. Managers need to:
Shift the focus of career conversations from promotion to progression and development in new areas of the business.
Promote a culture that supports career experiments, job swaps, secondments, and mentoring.
Be rewarded for retaining people across the whole business, not just their department.
Retaining your employees is a common challenge for organisations, but it is not insurmountable even in these challenging times. By proactively addressing turnover, organisations can cultivate a loyal and productive workforce for long-term success.
