There is a new business battleground: retaining talent. Companies are competing not just for customers, but also for talented employees. In September, the U.S. unemployment rate dropped to 3.5%. There are currently more jobs available than qualified job seekers. What does this mean? The best talent is already employed.
These talented individuals are working. They are also quitting. The job market just experienced the highest “quit rate” since the Great Depression. Strong economies cause this kind of spike because workers have more employment options. Competition is high, and the fight is on for companies to recruit and retain their share of qualified talent. The facts are 76% of CEOs rated “retaining existing talent” as the top management challenge. Others cited “attracting qualified talent” as one of their top concerns.
Alarmingly, 40% of workers plan to look for a new job within the next six months, and 69% state they are already looking. For employers, those figures are frightening. As a company, you work hard to hire the best workers carefully, and once they’re hired, you want to keep them.
When a good employee leaves, workload increases, productivity sinks and morale can suffer. Additionally, recruiting, training, and onboarding new hires can be difficult and costly. The solution is to focus on retention. Keep your employees happy, so they don’t leave. Before implementing an employee retention plan, determine why valuable employees are leaving your company. Here are some of the most common reasons employees jump ship to new employers:
Employee’s aren’t engaged
What is an “engaged” employee? These people are enthusiastic about, inspired by, involved in, and committed to their jobs. When employees are emotionally connected to their work, they put forth the extra effort. Gallup has been surveying employee engagement for the past 17 years. The research reveals that about 30% of U.S. workers are considered “engaged” in their jobs.
Unfortunately, the study also showed 53% of the workforce dwells in engagement limbo. “They may be generally satisfied but are not cognitively and emotionally connected to their work and workplace; they will usually show up to work and do the minimum required but will quickly leave their company for a slightly better offer,” states Gallup.
Companies perform exit interviews to learn why employees are leaving. Consider conducting “stay interviews” with your most tenured employees. Ask them why they stay. Why did they come to work? Why have they stayed at your company? What would cause them to leave? Do they have any non-negotiable issues? What changes or improvements would they like to see? As a company leader, you can use this information to strengthen your engagement and employee-retention strategies.
They have bad managers
“When you lose your top talent, the first place to look is at management,” because, “Most people don’t quit their jobs; they quit their managers,” says the vice president of recruiting at JPMorgan Chase, Wendy Duarte Duckrey.
Employees want to feel valued. You can show you value your employees by acknowledging and addressing their concerns or suggestions. Listening to feedback, taking action, or simply explaining why their suggestion isn’t possible goes a long way.
Managers should be meeting with employees regularly to discuss their career goals and job satisfaction. Once per year, performance reviews are the bare minimum. Experts agree more frequent interviews are much better, especially with millennials.
David Stevens, executive vice president of corporate relations at Valor Global, says, “Checking in with your employees a couple of times a year provides a sense of interest in the employee’s success and, in many cases, will give early warnings of dissatisfaction, allowing for an opportunity to change course if warranted.”
As a manager, show that you value your employees. Simply acknowledging their contribution and saying ‘thank you’ can make a big difference.
This doesn’t mean you have to compliment employees constantly. But, if someone does a great job on a project, be sure to recognize them for it. Companies that have a strategic recognition program observe less employee turnover.
Management roles are vital. “Organizations need to train people to be managers. Invest the time in developing, coaching, and mentoring your managers,” says Travis Furlow, a coach at Paperclip Thinking. “Too often, people are promoted into management and then are left to fend for themselves.” Make sure your management has all the training and skills necessary.
Employees do not see opportunity to grow
If employees sense they’ve hit a wall or can’t see a future in your company, they’ll look for other opportunities. If you provide the ability to acquire new skills and progress in their careers, they are more likely to remain loyal.
Career development and mentorship appeal to the most talented employees. Many times, career development programs encourage employees to stay rather than leave for another company. Remember, your best employees want to learn and grow. Unless they can try new opportunities, take on challenging tasks, and attend seminars, they will stagnate. A skilled, career-oriented employee needs growth opportunities within your company to reach their full potential. Allow your employees to explore opportunities inside your organization. Learning something new through a cross-functional project, leading or participating in a “lunch and learn,” will increase value and creativity. Don’t be afraid to stretch people with assignments that will expand their knowledge and sharpen their skills.
Technologies or procedures are outdated
Time, tools, and training should be your friend. If an employee is failing at work, ask, “What about the work system is causing the person to fail?” Employees need to have the necessary systems, procedures, and equipment to do their job well. If they don’t, they will move on to a company that provides the tools needed to succeed.
Keeping your technology and training up to date engages employees in the direction of your company goals.
Employees are unclear about your company vision
“Most people want to work somewhere with a strong corporate culture, one that clearly defines its mission and has a set of values that every employee, from the CEO on down, has bought into, believes in, and is tracking to,” says Rona Borre, CEO at Instant Alliance. Have a robust set of corporate values, a mission statement and specific goals. This will help direct employees’ energy and allow them to see how their contributions are part of the greater whole.
There is no work-life balance
Giving attention to employees’ struggles to manage work and home life will go a long way toward keeping top talent. “Little things that emphasize the importance of work-life balance go a long way toward making employees feel that they’re not just disposable cogs in a wheel, but a valuable asset to the company, and their families,” says Wendy Duckrey, “There is a talent shortage, and you’re going to have to give a little to be able to retain top talent.”
Research from Dice.com reveals telecommuting is the most-wanted benefit among tech pros. Sixty-three percent of respondents to a separate Dice snap poll indicated they would be willing to take a pay cut to telecommute at least half the time.
“This is a major demand we see from talent,” says George McFerran, the executive vice president at Dice. “And for organizations that can’t compete on salary to get that elite tech talent, offering remote and telecommuting options — even just part of the time or a few days a week — means they’ll be able to land those great hires.” Acknowledge that your employees have a life outside of work. If you consistently have them come in early and work late, they will inevitably start looking for another job.
The ability to work remotely has enabled people to work without having to go into the office. Remote work provides the kind of flexibility that employees want. This does not mean they won’t work the same number of hours, but rather that they can manage their work outside of regular office hours.
Three best practices for keeping employees:
Hire the right people
The starting point is hiring the right person for the correct position. The starting point is hiring the right person for the right position. Consider using the Predictive Index or Strengths Finder to ensure job candidates have the necessary skills and personality.
Offer great benefits
Companies that provide valuable benefits to their employees are more likely to keep them. Many surveys reveal that health benefits are most important, followed by retirement funds. With the costs of healthcare rising, a strong employee health benefit plan is essential to recruit top talent.
Employees look for ways to plan retirement. Employers can help contribute to savings by offering a 401k match. This is a great motivator for joining and staying at a company.
Companies that provide generous paid off-time avoid burnout and retain their employees more successfully. Employees appreciate being able to take a break without being punished. Often they value this more than a higher salary.
Pay above-standard rates
To hire and keep the best, you should pay the best. Not a ridiculously high salary for these people. However, pay that is at or below the market rate for the position tells employees, “you are not truly valued.” It’s worth considering structuring your pay scale from 20% to 40% over the market rate.
Talent can be your biggest asset or your biggest expense. According to Investopedia, it takes an average of 6.2 months to train a new employee to the break-even point. Though you will never eliminate employee turnover, following these strategies can help you keep your best.
Cassidy Jakovickas, CPA, is president and CEO of MBS Accountancy Corp. in Downtown Fresno.