Is talent competition harming your employee retention rate?
Have you heard the scary news? That we’re in the midst of one of the harshest and most competitive talent markets of all time? Red lights are flashing and sirens blaring all over the recruitment blogosphere about how impossible it is the find the perfect candidate for the most competitive jobs. Not to mention how difficult employee retention can be when there’s an infinite number of opportunities to jump to greener pastures.
As a result of this trend, you’ll probably want to start thinking about how you can navigate this harsh recruitment environment to ensure that both you and your company have the resources it needs to thrive. Yes, it is true that there is a shortage of talent, especially in highly skilled and technical fields. And yes, it is also true that staff retention is a real issue in places like Silicon Valley and other startup havens. And to prove that this problem is top of mind, research has shown that as many as 83% of recruiters believe that attracting and retaining talent is a growing challenge.
But the good news is that both of these issues are very solvable. Talent retention begins with a good recruitment strategy, plus a solid employer brand. They’re two sides of the same coin. Presenting your company in the best possible light, and having a rock-solid recruitment program gives you the best chance at hiring and retaining top employees for the long haul.
In this article, I’ll show you some ways to gain the competitive edge in retaining your most valuable employees. Before we get into ways to improve your employee retention via recruitment and employer branding, let’s take a look at why retaining talent is so important for businesses.
What is employee retention?
Before we get into why it’s important, you should be aware of what I mean by employee retention. In short, it refers to efforts by a company to keep talented and skilled employees with the organization. A high staff retention rate means that a large number of a company’s talent base have stuck around with the organization for a long period of time. It points to loyalty and engagement among the employees, and typically comes from being treated with respect, compensated appropriately, and a sense of belonging to something greater than themselves. So, as you can see, having good retention is a great thing from an employee satisfaction perspective.
Why is employee retention important?
What you may not know is the cost of having a low staff retention rate. While it’s difficult to pinpoint an exact number, the cost of employee turnover is estimated to be as much as 2.5 times an employee’s salary, depending on the role. In other words, one employee leaving can result in financial losses of more than double that employee’s salary in the form of lost productivity and re-hiring and training costs.
And that’s just for one employee. Turn that into a systemic staff retention issue, and you’ve got yourself a full-blown crisis. Couple that with the ripple effect on productivity, engagement, and culture for your remaining employees, and you can see why talent retention is a real issue for companies these days.
What is the current state of employee retention?
With those facts in mind, let’s take a look at some scary statistics around talent retention in today’s workforce, compiled by G2Crowd:
- 66% of employees expect to leave their organization by 2020.
- The top reasons millennials left their company were that they believed they’d be better off elsewhere, their career goals weren’t aligned with the company, and they saw a lack of opportunity.
- The top reasons all employees left their company, regardless of age, were lack of career development, lack of work-life-balance, poor compensation and benefits and overall poor wellbeing.
- Most HR professionals felt that employees left due to work location, career development and work hour inflexibility.
Of those surveyed,
- 78% said they’d remain longer if they saw a clear career path within the organization.
- 75% said they’d remain longer at an organization that listened and responded to their concerns.
Those are some seriously concerning statistics. Luckily, there are some clear ways to mitigate these talent retention issues.
What do employees want?
Do you see a trend in these answers? If you’re like me – and countless other professionals – none of these answers should come as a particularly big surprise. When you boil it down, team retention really comes down to knowing what employees want, and giving it to them (within reason and the means of the company, of course). Here’s my take away from those stats:
- Employees want to be heard.
- Employees want to know they have a future with company.
- Employees want flexibility and a balance in their lives.
- Employees want to be fairly compensated and recognized for their achievements.
- Employees want to know they and their families are taken care of.
This list is how I interpret what employees want from their companies, and why they would stay with them for the long haul. Workforce Institute takes this analysis one step further with their short list of what employees really want from their company:
- The ability to make a difference every day.
- Recognition when earned.
- Fair time off.
- Flexible work hours and location.
Take those two lists, stick them together, and you’ve got a pretty good idea of what your employees will be looking for on both a conceptual and a literal level.
Every company and every group of employees will, of course, be different. It’s important to truly understand your employees and work with them to determine what will make them happy. Figuring that out will be step one in improving your talent retention rate, and winning the dreaded talent war.
How do I improve my company’s employee retention rate?
There is no one solution fits all approach to fixing your retention rate woes. But, a rethink of your recruitment strategy, employer branding, and internal policies is definitely a great starting point to improving your employees’ long term loyalty.
Better recruitment and employer branding
Talent retention starts with recruitment. That’s pretty obvious. Finding and hiring the perfect candidate for the job is what kicks off the rest of your efforts to keep your shiny new employee happy and engaged for years to come. This starts with identifying what your ideal candidate looks like, and which aspects of your company culture you’d like to emphasize when you’re looking for them.
Of course, this ties right into your employer brand. Or, the image of yourself that you put out into the world for candidates to assess. Take a hard look at what your company has to offer in the way of culture, benefits, work-life balance, compensation, scheduling and location, etc. and come up with a profile for your team that you can present to aspiring employees.
If you have a clear picture in your head of what types of candidates you’re looking for, but your employer brand and pitch falls short, consider approaching decision makers in your company to make the necessary changes to close the gaps. Think about what your candidates want, beyond a pay check and structure your employer brand to meet those desires. Then tell them about it.
Once you’ve gone through these preliminary steps of identifying your ideal candidate, and formulating your employer brand, now it’s time to put it in front of the right people. That means all varieties of recruitment advertising and brand marketing to get the word out about your company and vacant positions. If you’ve done a thorough job of getting to know your target candidates, the right applicants should start to arrive.
But, getting your candidate’s attention is only the start of the battle. The real work is in moving your pool of candidates through the recruitment funnel in order to find the perfect one. How you interview, communicate and generally treat your candidates can also have a big role in staff retention down the line. Candidates who feel that they were treated fairly and with respect will be much more likely to feel a sense of loyalty to the company if they are eventually hired. Recruitment, in that sense, is sowing the seeds for how your new employee will feel about the company for the long term.
The bottom line is that staff retention starts with hiring the right candidate in the first place. Without knowing who the right candidate is, and aligning your brand with that person, it’s very difficult to hold onto an employee’s loyalty for the long haul.
Internal policies to improve talent retention
Now that you’ve gotten your new employee through the door, this is where the bulk of the employee retention work begins. Your candidate is now a full-fledged member of the team, and they’ll be expecting your company to deliver on all of those great promises from your employer branding.
Remember, your new employee will want to feel like they’re part of the team, will want to be engaged, and, eventually, will want to know how they can move up and make more of an impact at the company.
Some great ways to ensure that your new employees (and older ones too) are happy in their positions is to maintain open lines of communication with the team. Keep a finger on the pulse of your workplace morale using surveys. Encourage managers to meet regularly with their employees to talk about their development, their concerns and their aspirations. Always ensure that your employees feel like the company is delivering on their promise, and if they don’t feel that way, take the appropriate action.
A great way to do that is to revisit your existing company policies and assess whether they’re inline with what your employees want. Are your policies working, or are some of them redundant, getting in the way or productivity or bringing down morale? If the answer to any of those is yes, then change the policy.
Here are some suggestions for policy changes that can address many of the core employee wants outlined earlier in the article, and ultimately improve your staff retention rate:
- Work with your employees to create and commit to a career growth plan. Staff retention improves when companies offer vertical movement.
- Encourage and fund professional development and ongoing training to facilitate your employees’ growth plans.
- Start a policy of ongoing and honest feedback, from all levels of the organization. Empower employees to speak their mind if they have a concern to give them more ownership over their work and the company direction.
- Recognize employee achievements. When an employee goes above and beyond for the company, reward them for their efforts.
- Hold regular team events and casual meetings. This will help foster a sense of belonging and community – one that employees won’t want to leave.
- Offer flex hours, remote working, and more flexibility around time off. Let your employees know that you value their personal lives, and work with them to determine the best schedule for both of you.
This list is by no means exhaustive. Again, it’s always important to know what your employees want and what they’re lacking so that you can take the appropriate steps.
As we talked about at the start of the article: We are in a serious talent crunch right now, and job seekers have more options than ever when choosing an organization. Couple that with the fact that many younger workers are still trying to find the perfect company for their career aspirations, and you’ve got yourself a recipe for high employee turnover, and low talent retention. Taking the appropriate steps during recruitment, employer branding and talent management will go a long way in helping your company not only hire, but retain the employees who will help guide your business into the future.