Why Employee Retention Strategies Are Central To Human Capital Management

Today, organizations spend a significant amount of time, effort, and capital to hire the crème de la crème across all fields. However, the satisfaction of existing employees is often overlooked, leading to a low employee retention rate.

According to a report released by the Bureau of Labor Statistics, a staggering 4.3 million Americans resigned from their jobs in August 2021 — a record-breaking number since 2000. 

Moreover, the 7.7 million individuals who were already unemployed aren’t lining up for the estimated 10.4 million open positions either. 

So here's the million-dollar question — why are employees quitting their jobs? Rather than wasting company resources on traditional employee satisfaction reviews and mainstream initiatives, knowing the real answer to that question is crucial. Only then can businesses create practical and long-term solutions and boost employee retention. 

Why Are Employees Leaving Their Jobs? 

From low wages to poor flexibility, there are many reasons why people are abandoning their jobs. However, here are a few important ones: 

1. Low wages

2021 saw a surge in strikes by employees, especially in the retail, manufacturing, warehouse, food, and hospitality industry. In fact, health workers, despite being categorized as essential workers, saw no increase in wages even after the pandemic was under control and the economy was gradually reopened.

2. Unmanageable workload

Employees are experiencing burnout from their excessive workload and exploitative work schedules. In many cases, there is a serious disconnect between employees' wages and the workload piled on them by their managers and supervisors.

When one worker quits because they cannot keep up with the extra shifts, their workload is transferred to another, who will leave for the same reason, and the cycle continues.

3. No chances of career advancement

Millennials these days want more out of life and their jobs. While they appreciate their careers and take them seriously, they don’t want to be doing the same work ten years down the road. If they see no possibility of climbing the career ladder, they will look elsewhere. 

4. Unsatisfactory benefits

Apart from monthly wages, what benefits are you offering your employees? For example, do you provide health insurance, a company car, vacation time? Employees are no longer only looking for a fair wage — they also want other enticing benefits.

If you carried out a survey today, you would find that employees are willing to take a lower wage at a new job with added benefits than higher pay and no benefits.

5. Lack of employee recognition

Everyone appreciates a pat on the back for their hard work once in a while, especially if they go the extra mile. If your employees put in extra shifts or work late nights to complete a proposal and get no recognition or appreciation, they are bound to lose morale, and the quality of their work might plummet.

6. No options for remote work

The pandemic showed that remote work was possible and, in some cases, more productive and effective than a 9-5 at the office. It forced the corporate world to transform its work practices. Many remote employees are not ready to return to the office if they do not need to. At the least, they want hybrid jobs that let them alternate between remote and physical work.

Benefits Of Healthy Employee Recognition Programs

The benefits of employee recognition programs go way beyond saving the company a couple of dollars. Employee recognition programs have a wide range of advantages that benefit top management, employees, and customers. Some of them include:

1. Lower costs and higher revenues

Large US companies spend roughly one trillion dollars replacing employees annually. It takes up to twice the annual wage to interview, hire, onboard and train a new team member. Not to mention the time and human resources that go into the recruitment process.

With better retention rates, businesses can avoid these costs and losses. 

2. Higher levels of morale

If you're constantly replacing team members, you'll end up burdening other employees with the responsibility of teaching every new hire the ropes of the business. 

On the other hand, it's also much easier to collaborate with team members with whom you've already built a professional and healthy rapport. With high retention levels, employees better understand how to work together by leveraging each other's strengths for higher performance levels.

3. Preservation of institutional knowledge

There is a certain amount of knowledge, skills, and experience employees amass the longer they’re at an organization. This means that they can pass off these skills to new employees and prepare them for succession, in turn, giving the company a competitive edge. 

However, if you keep losing team members, especially those in senior roles, the loss is much more than money and time spent looking for a replacement.

4. Increased productivity

When you work a particular job for a long time, you find hacks that improve the quality of your work while reducing the amount of time it takes to complete a given task. However, it is hard to reach this performance level when employees are continuously replaced.

5. Better customer experience

Workers who have been with the company longer know how to handle all kinds of customers and quickly solve all problems thrown at them. They are well aware of the company values, goals, and expectations, and embody that in their daily operations.

Employee Retention Strategies

By focusing on tried-and-tested employee recognition strategies, you can go a long way towards developing a high-retention workplace with a satisfactory employee experience. To build a strong retention program, consider implementing the following strategies within your organization. 

1. Listen to and act on employee feedback

As part of your new retention program, it's vital to pinpoint the root cause of dissatisfaction. Collecting and analyzing employee feedback will help ensure that your retention program meets your company's needs on an ongoing basis. 

One simple way to accomplish this is through employee surveys and exit interviews. Ensure that these surveys and interviews are open-ended and anonymous so they can speak as candidly as possible.

Here are a few questions you can include: 

  1. What does your new position offer that influenced your decision to leave?
  2. What could we have done better?
  3. What things could your manager have done better?
  4. How would you describe our company culture?
  5. Do you feel like a valuable part of the company?
  6. Do you have all the tools you need to succeed at your job?
  7. Do you feel your job description has changed since you were hired? How?
  8. What's the best part of your job?
  9. What's the worst part of your job?

2. Hone your onboarding process

A new hire's first few days are extremely critical, and that's why it's important to offer respect, support, transparency, and clarity right from the get-go. An effective onboarding processmay include a company overview, a team lunch, a CEO meet-and-greet, and a mentorship program that can help them quickly assimilate into the work environment. 

3. Embrace remote work and flex scheduling

Now, more than ever before, it is time to consider offering remote and hybrid work opportunities to your workforce. Beyond COVID-19 workplace responsiveness, these perks demonstrate to employees that you value their work-life balance and are willing to accommodate their personal needs. It also shows them that your organization is progressive and adaptive.

4. Leverage performance reviews to propel employee performance

Ideally, employees should be empowered to share their goals so that when it aligns with the company's needs, they'll be the first to hear about new opportunities for growth. Then, your HR team can implement technologies like Eloomi, shown below, which auto-suggests plans and goals based on a real-time digital performance conversation.

‍5. Invest in professional development

If you want to hold onto your best talent, it's imperative you provide opportunities for career advancement. High performers value learning and development, and when your best employees believe they can progress with you, they'll stay with you.

Providing learning opportunities can keep employees motivated and poised for future growth opportunities. This is important — lacking career development is one of the key drivers of attrition.

If employees don't see you investing in their future with you, they'll begin looking elsewhere. On the other hand, better-trained employees are more likely to stick around and better equipped to contribute. So, consider offering perks like job-specific and industry training opportunities, support for further education, and tuition reimbursement.

6. Employee appreciation initiatives

Rewarding your employees for jobs well done can have a massive impact on employee morale. Check out our list of the best employee recognition software, that helps businesses organize the likes of milestones, birthdays and anniversaries celebration programs, and personalized perks like quality coffee, craft beer, or team outings. Here’s an example of a popular solution Bucketlist. 

7. Invest in employee engagement software

Employee engagementrefers to how invested, enthusiastic, and committed employees are to the firm for which they work. While engagement is great for the emotional well-being of your employees, making a concerted effort to improve it is also a sound business investment.

As shown in a Gallup employee engagement survey, highly involved teams are 21% more successful than disconnected teams, which lose American businesses $550 billion annually.

Employees who feel tended to by their employers are more likely to return the favor and increase their productivity. Engaged employees also actively look for ways to improve the company's efficiency and profitability. 

Instead of traditional forms of employee engagement, invest in more thorough and cost-efficient engagement software to address the concerns of your workforce and boost employee satisfaction and performance. The right engagement program will help create and maintain a safe and healthy work environment by prioritizing mental and physical well-being and fair financial remuneration. 

According to PwC's poll conducted in August 2021, 65% of 1007 permanent and part-time employees are looking for a new job. This number has almost doubled since May 2021. 

Bottom line — revisit your employee retention strategy at least once a year. This means staying current on best practices in workplace culture, developing strong manager-employee relationships, team-building activities, and ensuring market standards for salary and benefits. That's the way to keep top talent happy — and at your company.

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