If I told you there is a low-cost way to recruit proven talent that intimately understands your company’s business, fits in well with its culture and can hit the ground running, you might be inclined to ask what kind of snake oil I’m selling. It’s not magic that I’m pushing, just common sense.
The talent that I’m referring to currently sits within your organization, providing their valuable services that is sometimes unappreciated and overlooked. I am talking about, of course, your employees. That’s right, if you have only been focusing on recruiting new talent to drive your company, lets take a few minutes to talk about retention.
Throwing money at the retention dilemma may seem like the easiest solution but it delivers the least amount of value to your organization.
In today’s highly competitive environment, many companies are fixated on winning talent but not so much on keeping it. However, there is a strong business case for investing in retention. Consider these important statistics:
- LinkedIn estimates it may cost twice the salary of the worker to find a replacement.
- In the US, the federal government reported that voluntary leave rate of workers is near record highs as unemployment hovers around 5% at the end of February
- In Europe, that same rate is spiking in the UK and Germany, according to Mercer’s 2015 Turnover Survey
- In markets such as India, employers have taken to aggressively counter-offering packages made to their workers, according to the Economic Times
It’s clear that retention should be a priority for every organization because the benefits are clear: lower overall talent costs, stronger business continuity and greater employee engagement and loyalty. However, it’s also not surprising that with more opportunities available, workers are seeking greener pastures. If you’re seeing retention rates slipping in your company, the time to take action is now. So how can you protect your most important assets from talent poachers?
First of all, don’t panic. Some of the most desirable employer brands struggle with retention. According to Payscale, Amazon and Google have a median employee tenure rate of about a year. These well-respected technology behemoths see turnovers rates way above than the average company. It’s indicative of the uber-competitive technology sector and how workers there have many opportunities. Payscale in its Seventh Annual Compensation Best Practices Report also found that for the fourth consecutive year, survey respondents cited retention as their top concern.
Do you know the top reasons why you are losing talent? Higher compensation is usually one of them, but there are many other factors why your workers are leaving. If you don’t know what they are, actively survey outgoing workers in exit interviews and develop a plan to stop the hemorrhaging.
Recent studies have indicated that respect and feeling valued play an important role in workers’ decision to stay. Research firm Great Place to Work recently surveyed 18,86,543 employees at 1,064 companies in nine APAC countries. Employees of the top 60 organizations said welcoming staff suggestions and recognizing their contributions are critical to their desire to remain.
Last year LinkedIn surveyed more than 10,000 people who changed jobs and found that 42% would have stayed if the employer had done something to keep them. Another reason they chose to leave is dissatisfaction with rewards and recognition.
Throwing money at the retention dilemma may seem like the easiest solution but it delivers the least amount of value to your organization. Beyond a monetary approach, there are many ways to win the hearts and minds of your employees. They include:
Strive for a better work-life balance. This is a persistent issue that leads employees to part ways with their employers. You should survey staff to find out how you can achieve a better balance for them, what their wants are (within reason) to lighten the workload and what additional resources are needed.
Recognize their contributions. This may provide the greatest return in terms of employee engagement and retention. Millennials especially desire recognition of their value and contributions, so make sure you have a process in place. These programs require a small investment but they have a big impact on your employer brand.
Benefits are crucial. A recent US study on the Affordable Care Act (Obamacare) revealed that despite the availability of government-subsidized health insurance, most companies are retaining their health coverage to attract talent. Companies are also stepping up their benefits offerings such as unlimited vacation policies, subsidized childcare, on-campus valet services and many others.
Recruiting talent should always be a critical component of your talent strategies because voluntary turnovers are not going away. However, you can stem some of the losses by understanding what makes your workers happy and implementing steps to achieve those goals.
For more tips, read Jim Stroud’s blog on “Retention is the new recruiting.”