Employee Retention Mistakes Can Be Avoided
Employee retention mistakes are costly. Unfortunately, our employee engagement survey research shows that companies continue to struggle with the attrition of top and high potential talent. While companies are getting better at understanding what drives higher levels of employee engagement, many people managers still struggle to truly understand why people leave and the impact employee turnover has on their business.
Should I Stay or Should I Go?
A recent Gallup poll found that it takes 20%+ pay raise to convince most employees to leave a job where they feel engaged but almost no pay increase to persuade unengaged employees. The link between engagement and retention is further reinforced by data from LinkedIn which found that over 90% of employees would stay longer if they had more opportunities to learn and grow in their career.
Employee Retention Mistakes Need to Be Avoided
With companies asking employees to do more with less, even small amounts of employee attrition can cause a wake of problems. PwC’s recent Global Workforce Hopes and Fears Survey found that 20 percent of employees are likely to switch employers within the next twelve months. Can you afford to lose 1-in-5 of your high performers?
The Cost of Employee Turnover is Probably Higher than You Think
Of the multitude of people functions in each organization, turnover is by far the most costly because of its harmful effect on revenue, profits, morale, and customers. For every employee that leaves, you should figure twice the loss of their salary plus the loss of productivity as you recruit, hire and train replacements. And this doesn’t even take into account the loss of key employees who were high performers in critical jobs or on major customer accounts.
5 Employee Retention Mistakes to Avoid and What to Do Instead
Leaders need to take a more careful look at what they can do to retain top talent and increase employee engagement. Based upon data from when we assess organizational culture, here are the top five employee retention mistakes followed by effective solutions:
A better approach is to gather and report employee retention data based upon your talent management strategy in a way that provides valuable business insights. For example:
— How does attrition compare to last year’s number or to the industry average?
— Are the employees who leave low or high performers?
— Did exiting employees have high or low potential? Are they in a critical or strategic role?
— Are there any tenure, role, manager, function, or geographic specific trends related to departing employees?
— Is the expertise of departing employees difficult to replace?
— Did exiting employees fit into the organizational culture?
— Does the turnover reflect a problem with diversity or inclusion?
You get the idea. Start with your business and talent management strategy and then measure and report on what matters most.
How can leaders expect to decrease unwanted turnover if they fail to fully understand why key employees leave and what to do about it? The employee who is on the way out has little incentive to tell the real reason for their departure — they need a good reference and don’t want to burn bridges.
A better approach is to conduct social-based employee exit surveys to gather engagement retention feedback from both exiting employees and their peers. This innovative employee exit survey approach drives an average 80% response rate compared to an average 20% response rate from traditional exit surveys.
Then, once the data has been collected, make sure you analyze the results and implement clear actions to ferret out the root causes of unwanted turnover.
Too many companies identify what they think will work, make half-hearted efforts to improve, or fail to thoroughly re-evaluating or communicate its effectiveness.
Whatever the issue, meet with the manager to see what can be done to proactively engage and retain your top talent. The most common retention plans directly impact job flexibility, pay, the meaningfulness of work, and the opportunity to learn and grow.
The Bottom Line
Smart leaders manage employee retention as carefully as they manage the bottom line. They understand the impact on the business, identify the root causes of attrition, and address retention issues with practical and targeted actions within their overall talent management plan.
To learn more about how to avoid employee retention mistakes, download the Top 10 Research-backed Ways to Better Engage and Retain Top Talent
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