You Stand to Lose Half Your Top Talent. Here's How to Stop Those People From Leaving. Money plays a smaller role than you think.
By Natalie Lambert Edited by Dan Bova
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When a New York interior design firm lost nearly a quarter of its workforce last year, owner David Ashen realized he had a culture problem. Bringing on a new business partner had changed the company's atmosphere, and his employees didn't hesitate to vote with their feet.
Related: Most of These 9 Ways to Keep Your Best Employees Don't Cost Anything
It's the new norm. Employees who aren't satisfied with their jobs -- for whatever reason -- have grown less willing to stick it out and see if things improve. U.S. job openings hit an all-time high this year as a growing number of workers voluntarily left their positions for ostensibly greener pastures. Generational changes have fueled some of the turnover -- young employees entering the workforce demonstrate a higher propensity for job-hopping than older workers, with 43 percent of millennial workers expecting to change jobs every few years. On top of that, unemployment has fallen to its lowest rate in 17 years and salaries continue to grow, making it easier for employees to walk away from their jobs.
As organizations struggle to build successful teams from an ever-narrowing talent pool, employee retention has emerged as top concern for business leaders. Eight in 10 HR leaders say they're more concerned about the talent shortage than they were a year ago, and nearly half cite retention and turnover as their top workforce management challenge. Meanwhile, companies continue to lose $11 billion a year to employee churn.
How many of your employees are on the cusp of leaving? Surveys suggest as many as 50 percent will quit if a job with better benefits comes along and 42 percent will defect for a more flexible work environment. About a third would consider leaving for a higher position, better company culture or a shorter commute.
Related: 11 Proven Ways Young Entrepreneurs Can Retain Employees
So, what can you do about it?
Get employees engaged in their work.
More than a third of employers anticipate losing workers this year, and 45 percent cite salary as the main reason. But, this is often a common misconception among business leaders. Employees leave their jobs for all sorts of reasons, and money plays a smaller role than you might think.
The most common causes of employee dissatisfaction include heavy workloads, lack of job training and poor performance review processes. Lack of trust is also a major factor in high turnover rates. Researchers say burnout is responsible for anywhere from 20 to 50 percent of the exodus in many companies.
But, here's the good news: At least 75 percent of voluntary turnover stems from factors business leaders can influence. In fact, most can be overcome simply by improving employee engagement.
Creating a better employee experience influences everything from employee productivity to customer satisfaction to profits -- it can also have a significant impact on employee churn rates. Highly engaged employees are 87 percent less likely to leave their companies. Organizations that invest in employee experience have an easier time attracting and retaining top talent. They appear on Glassdoor's list of top workplaces 11.5 times more often and LinkedIn's list 4.4 times more often.
With just one in three employees actively engaged in the workplace, it's no wonder so many of them have one foot out the door. As many as 16 percent of workers are actively disengaged, whereas a full 51 percent simply aren't excited about their work. Companies might not be able to do much to win over the former group, but there's hope for the latter. Creating a better employee experience can help reclaim the interest of the majority of these employees and improve company performance overall.
Related: How to Keep Those Talented Employees of Yours From Fleeing to Competitors
Key drivers of employee engagement
If money doesn't fuel employee engagement, then what does? According to one study, it all comes down to whether employees feel like the company is invested in their success. When Gallup researchers analyzed the factors behind employee turnover, they found the top predictors of employee loyalty include:
- Clear expectations
- Materials and equipment to do the job well
- Opportunities to do their best work every day
- Belief that someone at work cares
- Encouragement to grow and develop
- A sense that their opinions matter
- Commitment to a larger mission or purpose
- Belief that coworkers are committed to quality
All of these factors influence whether employees feel supported in doing their best work. When these needs are met, researchers say turnover is likely to be low. When too many obstacles stand in the way of employee performance, however, engagement flags and workers start handing in their notice.
One of the most important things an organization can do to foster engagement and improve retention is to remove the roadblocks that frustrate employees' efforts to excel. By addressing pain points, such as overly complex business processes, hard-to-use software, hard-to-find information, unnecessary busy work and time-wasting interruptions, companies can pave the way for success on the job and demonstrate they value employee happiness.
As the proliferation of economic opportunities threatens to lure more employees away from their current jobs, the ability to retain talent has become a crucial differentiator for businesses. Investing in employee engagement helps minimize turnover and its associated costs, in addition to fostering a more productive and successful workforce.
