After what has been a tough year for businesses in many industries, keeping employee turnover and recruitment costs low is critical. By keeping their workforce as stable as possible, businesses can better maintain productivity and quality standards, while limiting the resources spent on finding and onboarding new talent. Improving retention, however, is a complex issue.
Workers leave their jobs for a wide variety of reasons, and employers can only improve retention by understanding what push and pull factors drive employee turnover in their operation. Most commonly, this means examining how businesses engage employees with regard to their growth, their stress levels, and their quality of life both in and out of work. That, in turn, provides them with the information they need to make meaningful changes.
Employee stability and quality of life
Surprisingly, a survey from Instructure and Harris Poll in 2019 found low pay to be the biggest reason that workers leave their jobs. This doesn’t mean businesses are underpaying their employees with regard to market values, though. Rather, it’s a quality of life issue for workers in specific parts of the country. Wages are rising only slowly, often not keeping up with the increasing cost of living in Australia’s urban centres.
According to a report by Pricewaterhouse Coopers (PwC), the majority of urban middle-income workers earning around $80,000 – $100,000 per year expect to never be able to afford a home within a reasonable commuting distance to their place of work. As a result, workers often leave well-paid positions in order to improve their quality of life—and their buying power—by moving somewhere more affordable.
In order to deal with this, businesses in these high-priced urban centres need to find ways to compensate. That might be something a simple as introducing more flexible work options, allowing employees to live further away from their place of work, to something as drastic as moving the business to a more affordable area.
Engagement and growth
A lack of engagement and guidance with regard to growth is the second most-cited reason that employees begin looking for the door. Fully 77 percent of respondents stated that they felt that they were “on their own” when it came to developing their career. For skilled and ambitious talent, this can be a powerful incentive to move on quickly. More importantly, because of the growing skills shortage in Australia and elsewhere, these workers are often able to find new positions that can help them move forward. To avoid frequently losing critical and talented employees, businesses need to take preventive measures.
Implementing a robust employee development program isn’t just about holding on to skilled workers, though. While it isn’t technically an employer’s responsibility to ensure that employees progress in their careers, developing employees, and ensuring that they grow inherently makes them more capable, productive, and useful.
Keeping work stress under control
The Hays Salary Guide noted a shocking 30 percent increase in the amount of overtime worked by employees since just last year. Most employees work “significant” amounts of overtime, with 18 percent putting in up to 10 hours, and 10 percent working over 11 hours of overtime. This incredible increase is often the result of growing businesses relying on a workforce that can’t expand quickly enough.
As they grow, businesses who have difficulty finding the talent they need in a tight labour market are forced to rely ever more heavily on the employees they have. This is particularly true for highly skilled employees, who are key to the proper functioning of their operations, and who are difficult to replace. Of course, this tactic is unsustainable, because those workers can’t indefinitely take on ever more work. As their work/life balance deteriorates, they burn out and simply leave. Often, they’ll be recruited away directly by competitors offering better conditions and a more controlled workload.
In order to avoid this type of scenario, growing businesses need to carefully manage the workloads of key employees. Moreover, they need to develop strategies to encourage a healthy work/life balance, and a healthy, productive culture in the workplace.
Fundamentally, businesses need to consider what motivates specifically their own employees to leave and seek employment elsewhere. This means finding ways to communicate effectively with current team members, conducting exit interviews with departing employees, and critically examining the business’ systems and policies as they pertain to talent management. In doing so, employers can better understand how to motivate their employees to stick around for the long term, making recruitment more efficient and more cost effective.