Employee retention is high up the HR agenda in many organisations right now. Skill shortages mean recruiting replacements is time-consuming and expensive. If you can even find the cabndidates.
Over 30 years we’ve talked to thousands of individuals about their careers and the decisions they’ve made. That led us to develop an eight factor model that underpins the design of our exit interview service. The model captures the main reasons why people choose to exit organisations.
What we’ve discovered over time is that there are changing patterns and trends. For example, right now the “cost of living crisis” has pushed money higher up the reasons why people choose to change job. In many cases they simply can’t afford not to seek a higher level of income to maintain their lifestyle.
Reverse engineering the model
What we can do is turn our exit interview model on its head. If we know the main current drivers of attrition we can flip those into an agenda for employee retention. Helping focus time, energy and budgets on the things most likely to encourage people to stay. Ideally preventing them from even looking elsewhere.
Looking at what we’ve seen and heard over the last 12 months across all our career activities there are four factors that are dominating the employee retention agenda.
We’ve already said it, inflation and rising interest rates have hit people hard. To maintain lifestyles, maybe even stay solvent, people are looking around for better pay. And the skill shortage environment means they can often get it. Employers offering substantial incentives to candidates to change jobs. Why stay put for a 5% pay rise when you can get 15% for jumping employers?
The comments we’ve been hearing include that employees don’t always feel that companies are sharing the benefits of strong sales and profits with their staff. There’s a disconnect say between upbeat statements about sales growth and the scale of pay awards being offered.
Others tell us that employers aren’t talking about pay often enough. Relying on an annual review system when prices at the supermarket and mortgage increases are happening weekly and monthly.
The message here is clearly that you have to keep pace with the market. And the market is moving fast… Retaining staff is heavily dependent on your ability to stay in touch with competing employers – fall behind and the incentive to leave grows.
This factor is about the full spectrum of employment based relationships – from colleagues and management to suppliers and customers.
Two key factors stand out here. Firstly individuals are talking a lot about being fed up with propping up under-performing colleagues. Sometimes to the point of feeling exploited. So the message to leaders is to be on top of performance management.
The second trend is individuals talking about being micro-managed. A sense they are not trusted and are given little or no freedom to act independently. They report a lot of management and supervision but not much leadership.
The result is a lack of trust in leadership. Something the best employers are really good at. When leaders lose trust, they lose followers.
Employment relationships flourish when employers and employees are both getting what they want out of their relationship. In recent times more and more individuals are leaving because they simply don’t feel the employer is interested in their career beyond there immediate job. A sort of “just get your head down and get on with it” approach.
What they want are employers who care about their longer term aspirations. Who take a keen interest and are prepared to support them with coaching, training and development opportunities. Instead their seems to be a reluctance amongst some managers to talk to their teams about careers.
Why is that? Maybe because nobody is talking to them about their career either. Or it could be a fear that encouraging development will make it harder to hold on to people in their current job? It may not be intentional, but a lack of career development is driving many resignations.
The challenge for employers is to make those discussions happen. To ensure they result in development that shows a path beyond the current role. Including, when the time is right, support to move on within the organisation. That’s what talent mobility is all about.
There’s a growing trend for people to leave organisations because they do not offer employee-friendly working options. Today many employees expect flexibility – including remote or hybrid working solutions. Employee commuting is down substantially compared to pre-COVID. Workers have voted with their feet – or should that be their season tickets?
Attempts to force people back into the office have been largely unpopular. The organisations that have gained have been the ones being creative about what the new working pattern is. They’ve recognised that their people like the savings on travel and the work-life integration made possible with new ways of working. The genie is out of the bottle.
Chiumento’s discussions suggests there are four key agendas emerging in employee retention:-
- Money – more frequent reviews that ensure you remain in touch with other employers looking for the same talent. Fall behind and watch attrition increase.
- Relationships – your people crave leaders they trust. Leaders who deal with poor performance – including toxic behaviours – and who know how to “let go”.
- Direction – you need to talk to your employees about the future beyond their current role. And give them the tools to achieve their ambitions.
- Convenience – you need to offer flexibility. The post-COVID world is different. People crave work-life integration and flexible working options are hugely popular.
If you’d like to talk to us more about employee retention then get in touch.