One of the most impacting aspects of what we do at People & Performance Strategies is when we help companies take steps to minimize attrition. After all, a lot of work goes into combing through qualified candidates, interviewing, on-boarding, and training employees. Then most employees don’t get fully up to speed until about a year after their first day.
No company likes to lose employees, but often an active effort to keep them just doesn’t take priority over things like growing new revenue streams or finishing the quarter ahead of last year. Research from the Society of Human Resource Management reports that attrition costs companies about 6 to 9 months of the departing employee’s salary. Besides the tangible financial costs of things like paying out accrued vacation time, higher unemployment taxes, and severance pay, turnover also comes with intangible yet no less impacting side effects. Things like lost knowledge, lower morale, and overworked teams who are picking up the slack. All of these decrease the chances of meeting financial goals.
When you consider the enormous cost incurred by employees heading for greener pastures, putting a proactive retention plan together suddenly seems like a no-brainer. To help you get started we’ve identified the three biggest factors (other than pay) contributing to employee attrition in 2019. Understand these three so you can fight them aggressively and minimize your workplace casualties.
#1. Culture
Corporate culture influences the way employees think, feel, and act on a daily basis. Companies with an attractive corporate culture are those that promote open communication and two-way feedback between managers and employees. Managers and leaders at these companies stay informed about problems and challenges so they usually know where to focus their attention. Enhanced communication at every stage like on-boarding, continued training, and career path guidance helps employees get the support they need to perform their best and thus produce results they and their managers can appreciate. If communication is lacking in any of these areas, employees can often feel as though they’re drifting unsure of expectations or of their own future with the company. And this can cause an employee to hunt for a position at an organization with stronger messaging between leadership and their workforce.
More often companies that show their investment into a bigger unifying objective are drawing and retaining more talent. Companies that give back through their support of specific causes and initiatives are increasingly more popular for the millennials entering the workforce. Moreover, if a company has a strong mission or vision that resonates with their workforce, this too promotes retention as employees are more engaged and invested in achieving the collective goal of the group. Unity in purpose will keep talent within the corporate walls more than an “every man/woman for themselves” culture. As long as individuals can see ways their career path and skill set are valuable to the cause.
#2. Management
According to Udemy, nearly half of employees said they’ve quit a job because of a bad manager. A manager’s performance has a direct and profound influence on their subordinates. But the truth is many managers are promoted before they’re ready and are not always provided the managerial training needed to effectively support their team. New managers are often put into their positions out of a desperate need to fill the role. This type of frantic promoting sets the manager and the team below them up for failure. It leads to underperformance, workplace stress, and people looking for a way out. Don’t let this happen to your team.
The most effective managers are trained methodically and strategically to fill a leader’s shoes. These managers take their seat knowing the importance of creating a culture of appreciation and they regularly dole out recognition. Effectively trained managers motivate and encourage employees, help them manage their workload, and take opportunities to give constructive feedback in a way that supports employee’s growth and development. Managers that know how to show respect for their subordinates create and maintain a standard of mutual respect seen not only between manager and team but also between team members. Thus, teams operate from a place of trust and become much more effective.
Managers are held accountable for team performance. But the pressure can be overwhelming to a manager that was never properly trained or prepared. They can end up imposing a hypercritical approach that stifles department progress. New employees usually try very hard to prove their value, and managers that hastily criticize their efforts will miss the opportunity to motivate and inspire their new hire. An overcritical management style breeds unhappy employees that will eventually search for other companies with better leadership in place.
#3. Growth Opportunities
LinkedIn’s 2018 Workforce Learning Report states that 93% of employees would stay at a company longer if it was invested in their careers. Companies that invest in their workforce reap the benefit in many ways. They continue to see more dedication and higher commitment to producing quality work from employees. And their workforce becomes increasingly more capable. As an employee grows in skill level and experience, he or she achieves that growth within the culture that commands the corporate brand. These brand ambassadors help to shape and strengthen your company culture and workforce buy-in from all.
Employees that work for companies that offer transparent and accessible opportunities for advancement, mentorship programs, or other forms of career path support like professional development opportunities have much more loyal and invested employees. They feel in control of their careers and at the same time committed to the company that gives them control.
Closing Thought
With all the money and time you spend to attract and hire talent, it makes sense to spend money to protect and grow the value of your investment. Retention programs come with many varying components, but if you want to see a real and lasting impact on turnover numbers and your bottom line, make sure your program includes an emphasis on Corporate Culture, Strong Management, and Growth Opportunity.