Over these next few blog posts, I’ll take a deeper dive into why people stay at companies, why they leave, and what organizations can do about it. Today, I focus on the many factors that contribute to retaining top talent.
When I’m out talking to HR professionals in my role with LINX WorkForce Innovations, I regularly hear the same thing – that retaining employees is their biggest challenge. It’s no wonder – it costs more than two times a person’s annual salary to replace them(1). Meanwhile, we’re living in a job candidate’s market, where there are more jobs available than people to fill them(2), and more than 80% of employees would consider leaving their current role for the right offer(3). Given all that, employee retention can feel like an impossible mission.
There are countless contributing factors to whether an employee chooses to stay with or leave an organization and company leaders can influence every one of them. I’ll address what you can actually DO about those factors in a future blog. For now, here are the top contributors to employee retention:
Begin with the basics
Ceridian’s Pulse of Talent survey says it best: “Employees who work in positive environments, with good colleagues, strong relationships with managers and are treated fairly – both in terms of growth opportunities and wages – are more likely to stick around.(4)” We don’t spend a lot of time talking about compensation and benefits as a reason employees stay, because we know money isn’t the strongest motivator for most people. But, it bears reminding to ensure these elements are competitive in your geography and industry, because if you don’t get these basics right, you don’t have a solid foundation to build on for other retention efforts.
Invest in employees
A whopping 94% of employees say they’d stay longer at a company that invested in their career(5). People who feel that their career is progressing with a company are 20% more likely to still be working there a year later(6). This takes shape in many ways, from formal development plans for each employee to regular performance-related conversations and training to develop their skills; in fact, 83% of employees say training is a factor in their job happiness(4). Leaders are key to staying attuned to employee needs and providing development opportunities.
Understand the whole person
Employees are people first, with interesting – often demanding – lives outside of their work. Companies that understand and respect this are more likely to retain their employees. There are so many ways to do this, including through benefits like leave to care for a new child or aging parent, adoption assistance, tuition reimbursement, wellness programs, and more.
Allow flexibility where possible
Another reason employees stay at companies is flexibility. Those who work from home up to 80% of the time are anywhere from 6-11% more engaged than employees who don’t(7) and companies that support remote work see 25% less turnover(8). Not only does it contribute to satisfaction and retention, it also benefits companies through increased productivity, with one Stanford Professor finding employees who worked from home all but one day a week were 13% more productive(8).
Nurture a warm culture and relationships
We all know what a difference our work relationships can make in our lives – for better or worse. It’s hard to overstate the importance of this when it comes to why employees choose to stay at a company. Positive colleague relationships cause 47% of people to remain at their companies(4), while company culture has a bigger impact on employee retention than the benefits package does(6).
Obviously, an employee’s direct manager plays a critical role in whether they stay. And, while the idea that people leave bosses, not companies, may or may not still be considered true, managers are still integral to the employee experience. In fact, 81% of people say they’d work harder for a more grateful boss(9). And, those who receive positive recognition for their efforts are significantly less likely to interview for a new job than those who don’t(6).
Once you have all of the above in place, LINX WorkForce Innovations believes you need to go beyond traditional employee engagement surveys to truly understand the satisfaction and loyalty of your workforce. Engagement surveys give some initial information on the what, but fall short on the insight needed to tell you why and how to transform your employee experience. We help organizations uncover deep human insights that reveal the real issues that need to be addressed. Then, we partner with our clients to develop custom action plans based on the opportunities we’ve identified.
Watch for Part 2 in this Retention Series on why employees choose to leave companies. And, following shortly after that will be Part 3 on what you can do about these reasons to stay or leave.
In the meantime, please share below what other factors you think make employees stay at companies. Why do you choose to stay where you are?
1 Center for American Progress: There Are Significant Business Costs to Replacing Employees
2 CNN Money: There are now more job openings than workers to fill them
3 Hays US What People Want Survey, 2017
4 Ceridian Pulse of Talent survey
5 LinkedIn 2018 Workplace Learning Report
6 TINYpulse Employee Retention Report
7 Gallup State of the American Workplace report 2017
8 TED Talk with Stanford professor Nicholas Bloom: Go Ahead, Tell Your Boss You Are Working From Home
9 John Templeton Foundation gratitude survey
Marilyn has a passion for Workforce Wellness. As co-founder of LINX WorkForce Innovations, she is keen on discovering and amplifying the “Voices of Employees” who are the “Consumers of the Workplace,” so that the right WorkForce solutions can be co-created the first time. Previously, she co-founded SIVO Insights where she provides thought leadership and creative thinking for Fortune 500 companies by uncovering consumer insights and experiences. For every endeavor, she believes in the power of a strong company culture, based on authentic connections, innovative approaches and a growth mindset.
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