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How To Improve Your Company's Retention Rates If you're taking good care of your employees, they're less likely to jump ship and go elsewhere.

By Stephen Maclaren

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.


As Virgin chief and business magnate Richard Branson famously said: "Clients do not come first. Employees come first. If you take care of your employees, they'll take care of your clients." And if you're taking good care of your employees, they're less likely to jump ship and go elsewhere.

Of course, it is anything but that simple in the UAE, where employee turnover is one of the most formidable invisible enemies of growth. According to Middle East jobs site, the annual turnover rate is a significant 21%, representing a cost of AED9.9 billion (US$2.7bn) to businesses every year.

Why is this a big problem in this part of the world? There are potentially many reasons we could list, but the big one is the fact that the national population is simply not big enough to sustain the explosive economic growth of the region, and so, a much higher mix of foreign nationals have been brought into the talent pool.

Related: Three Things To Remember When Managing Your Employees As A SME Owner In The UAE

On one side, this diverse pool, with its many ethnic and cultural differences, means a much more complex playing field for HR managers. And while the country has a rich culture of high salaries and cash rewards, the requirements of expatriates are constantly changing. Once upon a time expats would come to the Middle East for their three-year tax-free stint before heading home at the end of their contracts. Now they're increasingly looking for stability and longevity.

There is also the fact that the UAE is rife with opportunity. We have experienced so much growth in the past years and just a quick look around at the developments in Dubai (not to mention the upcoming Expo 2020) reveals a playing field with no shortage of options. Non-oil sectors such as construction, tourism, hospitality and banking are experiencing a huge influx of heavy investment, which is putting pressure on the existing workforce supply. In turn companies are willing (or let's say, "being forced") to pay higher and higher salaries to ensure they bag the top-tier talent. And where does that talent come from? A lot of the time, it's directly from your company's workforce.

Costly consequences

The consequences for companies losing staff are significant, both financially and otherwise. Costs include, but are not limited to, end-of-service benefits, losses from original visa and repatriation expenses that are not possible to claim back, loss of knowledge and training, increased workforce pressure during the search for replacement staff, loss of productivity and lowered staff morale, recruitment costs, and so on.

According to Deloitte principal Josh Bersin, the cost of turnover can be as much as twice an employee's salary, and even more for managers and highly paid executives. Meanwhile, focus is being taken away from core business matters, and employers miss out on growth opportunities, because they're not able to keep highly skilled and tenured employees in leadership roles long enough to manage (or see through) those expanding areas of business.

In this article, I present four considerations for companies when it comes to upping the retention rates, acknowledging at the outset that yes, the above-mentioned challenges unique to the UAE mean that there is no easy fix for us. That said, we still need to keep top of mind those strategies used by companies who are winning at the retention game.

1. Retention starts at recruitment

An obvious one, sure, but it has to be on our list. Just as a CV can give you clues about a prospective candidate's competency and responsibility, so too can it reveal whether or not they're in for the long haul employment-wise. Candidates that have hopped from job to job can be a gamble, and it's unlikely that your company is going to be the one at which they finally "find their calling." That said, if the candidate is nonetheless an ideal one from an experience point of view, you may just have to take that gamble. Hey, it's Dubai after all.

Related: If You Want To Grow Your Company, You Need To Hire

2. Flexible work options

According to Regus, 74% of candidates would choose one job over another if it offered flexible working, while a recent report by the Hay Group attributed the high rate of staff turnover in the Middle East to the 52% of respondents who felt their employers don't offer a good work-life balance. Many European countries offer flexible working as standard, and it's time the Middle East got on board. Examples include flexible hours, compressed work weeks, telecommuting options and forward work scheduling. The payoff for these policies is enormous, including engaged and loyal employees, increased productivity and reduced absenteeism and presenteeism.

3. Empower employees

Providing a range of employee benefits is one thing, but allowing employees to decide for themselves what benefits them the most is another. According to a report by ManpowerGroup, businesses that boast some of the highest retention rates are able to do so due to innovative benefits programs that let employees allocate for themselves perks such as travel allowance, medical packages, continued education, and so on.

4. Encourage learning and development

Providing ongoing training and helping employees set out clear career goals and paths makes them feel valued, important and invested in the company. According to the same ManpowerGroup report, top firms typically adopt a 70:20:10 approach, where 70% of learning takes place on the job, 20% through professional interaction (such as attending business seminars), and 10% through formal learning opportunities (such as training courses). This blended learning approach sets the tone for developing a culture of learning within an organization.

Some businesses would argue that it's counterintuitive to provide employees with attractive skills that could be snapped up by the competition, but the fact is, packaged properly with other retention strategies, doing so instills a sense of trust and support in the employee who will be happy to use their new-found skills to the advantage of your business, rather than elsewhere.

Looking ahead

Smart companies don't review the state of their finances just once a year, and it shouldn't be any different with the state of their biggest asset– their employees. Getting consistent and regular feedback is vital in identifying problem areas; so don't wait for an exit interview to find out where things went wrong.

Money can be a motivator, but it provides short-lived gratification, so the Middle East's longstanding HR attitudes need to be revisited to include more innovative and progressive retention practices if employers are going to nurture and keep hold of their top talent.

Related: Growing Your Company: Five Hiring Tips For Your SME

Stephen Maclaren

Head of Regional Sales Employee Benefits, Al Futtaim Willis

Stephen Maclaren is the Head of Regional Sales Employee Benefits at Al Futtaim Willis. Stephen has more than 25 years of experience in the insurance industry, of which the past 11 have been spent in Dubai. He and his teams support some of the largest companies and organizations operating in the Gulf region and broker extensively in the areas of employee benefits and operational risks.
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