The most important asset of any organization is undoubtedly its employees. Any change in employee metrics, be it performance, satisfaction, turnover etc. will have an impact on the company and its operations. Today, employee attrition is growing at a major rate, posing severe challenges to companies the world over and costing time and money to overcome.
Impact Of Employee Attrition
The Work Institute 2020 Retention Report reveals some vital statistics on employee retention and turnover:
- Nearly 40% of employees that leave an organization do so in the first year.
- Over 75% of employees who quit could have been retained.
- Voluntary turnover costs exceeded $630 billion last year.
Research shows trends of worsening employee retention rates especially with millennials and Gen Zs, who are prone to frequent job-hopping. A recent employee engagement survey by Gallup estimates that it can cost up to twice the annual salary of an employee to replace them. It is imperative for businesses to take note of the implications of such trends and take immediate action to minimize attrition rates in order to improve company performance and revenue.
Top Reasons For Employee Attrition
According to research, the top drivers of employee attrition are:
- Unsatisfactory compensation
- Inadequate benefits
- Lack of paid time off
- Unsatisfactory working relationships between employees and supervisors
- Poor working relationships between co-workers
- Anxiety over job security
- Poor work-life balance
- Changes in industry
- Regulation changes
6 Top Ways To Minimize Employee Attrition
It is essential for talent acquisition heads and HR managers to find ways to reduce turnover and retain top talent. Here are our top 6 suggestions to minimize employee attrition.
1. Hire the Right Talent
A major part of reducing attrition is making sure that the right person is hired in the first place. Research reveals that a significant percentage of workers quit their jobs within the first 3 months of joining, because it was not what they expected.
Talent acquisition heads need to be forthright and upfront about the requirements for a particular role, how the business operates, and about company culture. It’s also important that organizations make the time and effort to get to know the candidate well, enabling them to make better decisions about factors like company fit and role suitability. This could be accomplished by physical means such as office visits and interactions with co-workers, or remotely via video or virtual reality office tours. Having an efficient plan in place helps identify the skill gaps and enables recruiting leads to source and hire the most suitable talent.
2. Keep Your Compensation Competitive
One of the main reasons why people take, leave, or change jobs is salary and benefits. So it’s a no-brainer that competitive compensation is a vital factor in convincing people to stay at their current organizations. Studies have revealed a surprising number of organizations who fail to offer adequate compensation in accordance with employee performance and development.
Offer salaries that are commensurate with the current market rates and will be instrumental in attracting talented and qualified candidates. Be aware of the standard norms and competitor salary rates. Providing appropriate, timely benefits and rewards in keeping with employee performance and initiatives will go a long way in keep your employees content with their current positions. Establish HR processes to zero in on top performers, and conduct periodic gender and racial pay equity analyses to correct any imbalances in compensation.
3. Provide Opportunities for Career Growth
Lack of perceived opportunities for career development are among the top causes of dissatisfaction and high voluntary turnover among employees. A report by LinkedIn states that employees stay 41% longer at companies that focus on hiring internally as opposed to places that don’t.
Employees need to feel that their companies are invested in them and in their careers, and this feeling can be fostered by providing them with further training and growth opportunities. Train people in different departments in the organization, giving them a chance to view other job options within the company. Ensure that employees feel free to seek roles internally without fear of repercussion from their present managers. Identify skills in existing employees and connect them accordingly to upskilling needs or internal opportunities.
4. Reward and Recognize Employees
Showing employees that they are appreciated and valued is one of the most effective ways of retaining talent and reducing attrition. Be it in the form of verbal feedback, written reviews, or tangible rewards, receiving recognition and acknowledgement for one’s efforts is a major driver in encouraging people to remain at their current jobs.
Manager feedback plays an important role here. Studies have shown that people who receive positive feedback from their managers are more likely to be engaged with their jobs and less open to actively look for new opportunities. However, peer feedback is impactful too. In a recent survey, 75% employees stated that receiving peer recognition made them want to stay at their current organization longer. Leverage the latest technology to put in place comprehensive review systems and peer-to-peer recognition programs.
5. Offer Flexibility
Post the pandemic, working from home has become the new normal. For most people, flexible work is now perceived as being essential for a healthy work-life balance, making it an indispensable aspect of job satisfaction.
Employees have come to value the various benefits of flexible work schedules, and they appreciate employers who offer higher levels of flexibility. According to online job board Flexjobs, about 30% of employees said they quit their jobs due to lack of flexible work options, and another 80% confirmed that they would be more loyal to their present company if they had flexible work options. Be it working remotely, flexitime work, part-time schedules, maternity or paternity leave, or compressed workweeks, giving people more latitude is an important factor in reducing turnover. Furthermore, when managers plan work schedules and assignments keeping their resource’s interests in mind, they feel valued and motivated to perform better.
6. Work on Employee Engagement
The best leaders know that employee engagement and communication are key to employee retention. Dissatisfaction is something that tends to spread throughout a team if unchecked. If even a few employees are disgruntled, the other workers feed on this negativity and this affects the attrition rate.
It’s important to develop a company culture where people feel safe, happy, and committed to their work. Encourage them to have open communication with the management whenever they have any problems. Communication could be in the form of one-on-one meetings, town halls, or engagement surveys.
Managers should conduct regular feedback sessions with their team to touch base on how satisfied they are and their level of engagement with their role and the company. If they identify anyone who could be likely to leave, they need to get to the root of the problem and rectify the person’s issues as soon as possible. With consistent, candid communication, you can better gauge your employees’ sentiments, and create a culture of engagement in your company all the year round.
The bottom line is that attrition costs organizations heavily, and not just in terms of money. And when the people leaving are the ones who were driving the revenue, the fallout is even worse. But the good news is that with creativity, attention, and proper planning, attrition can be minimized.
At Employvision, a leading IT recruitment agency, we have been in the business of recruiting top IT talent for over 15 years, and we know how important it is to hire as well as retain exceptional talent. If you need the best technology talent, Employvision is here to help. Contact us and start hiring great talent today!