Retention 101: Keeping Your Best Employees in a Competitive Market

Before the pandemic, there were a million more jobs than job seekers, which was a challenging environment for employers. Employers had to compete for job candidates and ensure they could retain good employees or lose them to the competition. While the labor market has cooled from its peak activity in 2022, job openings continue to outnumber job seekers, suggesting that opportunities remain available for those seeking employment.

Employers continue to face the challenge of retaining quality employees. Even with fewer job prospects, the younger generations (X, Y, and Z) are not hesitant to leave an employer if they aren’t happy. That can have crippling implications for businesses that fail to create an employee-first culture.

Why Employees Leave and How to Keep Them

The reasons why employees leave vary, but they are all tied to the company culture (or lack thereof) and employees’ perceptions of where and how they fit in the organization. Generally, businesses that foster a culture of employee engagement, respect, and purpose are less likely to experience retention problems. According to a survey of 2,000 employees, nearly half cited corporate culture as the main reason they are looking for a new job.

Creating a high-retention culture starts with thoroughly understanding the pain points that trigger employee exits and a top-down commitment to an employee-first mindset. While this seems to run counter to the traditional notion that the customer comes first, studies show that if employees are happy, they’ll make customers happy, and your customers will take care of your bottom line.

Lack of Recognition

Employees who feel they aren’t being recognized for their efforts are twice as likely to look for a new job. Based on employee surveys, those who don’t feel recognized have interviewed for a job in the last three months.

Conversely, employees receiving recognition monthly or more are three times more likely to be productive, engaged, and loyal to their organizations than those not recognized.

Lack of Clear Expectations

When employees are left wondering what they need to do on a daily basis, they can’t know whether they are meeting their employer’s expectations. That produces insecurity and anxiety. Employees who feel well-supported by their line manager are three times more likely to feel engaged at work, contributing to higher retention rates.

These findings suggest that when managers effectively communicate roles and provide support, employees are more engaged and likely to remain with the organization.

Lack of Work-Life Balance

Employee burnout and workplace stress are the leading causes of employee turnover. Employees working for employers that stress work-life balance are more likely to stay. Employees are looking for remote work opportunities and flexible hours as a way to achieve a work-life balance. An increasing number of small businesses offer wellness programs, including gym subsidies or access to activities and apps to help motivate employees to exercise.

Lack of Career Advancement or Professional Growth Opportunity

A lack of advancement or growth opportunities can be morally deflating for employees who need to feel they are progressing in their careers. One study shows that 70% of high-retention-risk employees would change jobs to advance their careers. (Source: Towers Watson)

A LinkedIn study shows that 93% of employees would stay with their employer if it invested in their careers. According to Gallup, nearly 90% of millennials say their top priorities are professional growth and development opportunities.

Changing the Culture Starts at the Top

People know when they belong to an employee-centric culture. It’s demonstrated daily through policies and communications that foster transparency and a free flow of feedback up and down the organization. It’s an environment in which employees feel empowered and engaged. Building such a culture starts at the top, where the employee-first mindset is entrenched among the organization’s leaders.

Your employees are your best investment for growing your business – and your most significant cost when they leave. So, it’s worth the time and resources to retain them.

 

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