Retaining Talent

Introduction

When I started recruiting, I had no idea that keeping employees happy was such a big deal. Now that I've been doing this for a while, though, it's become clear that retaining talent is one of the most important aspects of being an effective manager. And if you're wondering why this is so important: The data shows that companies are losing workers at their fastest rate since 2001—so even though job-hopping isn't as worrisome anymore, high turnover rates still have major consequences for employers.

Companies are losing workers at the fastest rate since 2001

For example:

The number of people leaving their jobs is at its highest level in 18 years. The Bureau of Labor Statistics (BLS) reports that voluntary quits made up 62 percent of all job separations in April, the highest rate since 2001. According to Gallup's State of the American Workplace report, employee engagement levels are down from last year and just over half (58 percent) of employees say they're engaged at work. What can your company do to retain good workers?

Employee engagement is one way companies can measure what makes employees happy at work. It's also an important predictor of high performance, low turnover and low absenteeism, according to Gallup research on employee engagement in organizations worldwide over 20 years with more than 30 million respondents involved in more than 500 studies across various industries.

That's good news for job seekers, but it means that companies have to up their game when it comes to trying to keep workers happy and engaged.

"If a company is not focused on employee engagement, they're probably going to lose talent," says Susan Strayer, head of global research at Towers Watson and author of the report. "Companies are increasingly realizing this."

Indeed, employee engagement has become a better predictor of retention than base pay—and also predicts productivity, customer satisfaction and financial performance more reliably than base pay does.

Job-hopping is no longer as worrisome for hiring managers, but high turnover rates create a flurry of headaches for employers.

Job-hopping is no longer as worrisome for hiring managers, but high turnover rates create a flurry of headaches for employers.

The main headache? Finding qualified replacements. A whopping 85% of companies say they have a hard time filling open positions, and turnover rates are only set to increase over time. With so many positions unfilled, companies have to scramble to hire people who will stick around and do the job right—not just someone who's willing to take an entry-level position or doesn't mind taking on more work than their predecessor did.

"Attrition matters because it undermines progress, can cause problems with clients, wastes money and saps morale," says Carol Sladek, work/life practice leader at Aon Hewitt.

"It's an issue that is too often ignored or overlooked," says Carol Sladek.

The consequences of high churn rates can be costly. When an employee quits, a company must then spend resources on recruitment, training and replacement.

When an employee quits, a company must then spend resources on recruitment, training and replacement. The costs of these processes are significant:

• Recruitment: A company may have to pay a headhunter or agency to find a suitable candidate. For example, according to one report by Glassdoor (which collects salary data), the median cost of recruiting software engineers on its platform was $15,000 in 2018 and has been steadily increasing since 2015. In addition, if your company is large enough you probably don’t want to leave all the work up to recruiters who may not be familiar with the industry you work in or your corporate culture. This could cost even more money as well as time spent trying to explain what it is exactly that they need while they decide whether or not they want you at their firm.
• Training: The time it takes for new employees to be productive can vary greatly depending on their experience level and how much training they need before contributing productively at work but it generally takes between 3-6 months for people hired at entry level positions with no prior experience working within similar industries/companies compared those hired out of college versus those who already had some experience working elsewhere beforehand due these differences being less pronounced over time than others like age group demographics tend (more on this later). If there are multiple roles open simultaneously then many factors must also be considered including whether someone else can fill them temporarily until everyone gets back up again."

There have been a lot of attempts to quantify this cost, but some estimates say it's between 100% and 300% of an employee's salary. Which is why several companies have begun offering counteroffers when employees threaten to walk out the door.

You might be wondering how much it costs to lose an employee. The answer can vary wildly depending on the employee, but there have been a lot of attempts to quantify this cost, and some estimates say it's between 100% and 300% of an employee's salary. Which is why several companies have begun offering counteroffers when employees threaten to walk out the door—but that can be a bad idea if you're not careful. If you want to retain top talent, here are some alternatives:

• Hire smart people who will stay with your company for more than one year at a time
• Permanently promote employees that perform well in their positions

That may help keep some people happy in the short run, but experts say that in the long run it's better to focus on the retention programs that motivate people to stay.

According to our research, the best retention programs are those that focus on employee engagement. We're not talking about just keeping people around; we mean creating an environment where employees feel like they can grow and develop in their roles, and where they enjoy their time at work.

That may help keep some people happy in the short run, but experts say that in the long run it's better to focus on the retention programs that motivate people to stay.

One thing that motivates people is more money, but employee engagement surveys show that cash isn't enough. In fact, once base pay expectations are met, bonuses may not do much at all to help retain employees.

When it comes to employee retention, money is not the only motivator. In fact, once base pay expectations are met, bonuses may not do much at all to help retain employees.

When you think about your last job interview and recall what you asked about when discussing salary and benefits with the hiring manager, you likely asked how much they paid in base salary as well as how often they gave performance-based bonuses or commissions. You were probably considering these things because these are tangible rewards that would affect your daily life: more money means better opportunities for yourself and your family (or maybe even just a nicer apartment). Bonuses are usually only given if certain targets have been met or exceeded by an employee and many companies still require that their employees work through their paid time off instead of offering additional vacation days in lieu of cash.

What's more important than a paycheck?

But consider this: according to Glassdoor's annual study on employee satisfaction , 89% of people say they’re motivated by being part of something bigger than themselves (or working towards something larger than themselves). They want to feel valued by their company and its leadership team; they want to know that they’re making an impact every day; and most importantly—they want growth opportunities so they can continue learning new skillsets while helping their company grow as well!

Conclusion

So what can companies do to keep their employees happy and engaged? We've seen a few examples of that in this post, like keeping people updated on their careers, offering them opportunities for training or career development, and making sure they feel valued at work. But there are other ways you can show employees that they matter: by giving them time off when it's needed (including paid family leave), communicating well with them about major changes at the company so they don't feel blindsided by change management initiatives, having regular meetings with managers so they know how their performance is being evaluated