Big Debate Title

The importance of staff retention


Whilst most businesses will be focusing on shedding personnel, it is worth considering how retention will allow the organisation to recover after a crisis...

Words by Kieran Howells | Design by Matt Bonnar

 
 

Although the employment landscape is shifting drastically – millions of people currently fear for their jobs due to the fast impact coronavirus has had on business – staff retention is something that all firms should be looking at. As revealed in feature two - where HR Grapevine looks at whether HR should put people or business first – leading HR consultant Josh Bersin believes that it is by retaining staff that businesses will be able to recover after this pandemic. “The people in your company are the ones who will pull you out of a financial slowdown,” he wrote in a March blogpost on his website.

Plus, there is the money that good retention can save. HR Cloud research states that the cost of replacing a highly-trained employee can exceed 200% of their annual salary, whilst the process for the average employee - when taking into account onboarding, loss of productivity, candidate search etc - costs an average of £30,000 in the UK, according to ACAS. And these costs add up; the same report states that when combining the retail, legal, accountancy, advertising and technology industries alone, the annual cost of replacing staff totals £4.3billion per year. It is safe to say that when this pandemic is over, the cost will be much higher.

However, with many businesses looking at shrinking their workforce, retention might not, currently, be at the top of the agenda. Yet HRDs do consider retention – in normal times – to be a top priority. Future Workforce data states that 87% of HR leaders consider improved retention to be a critical or high priority for the next five years. It’s clear that not enough is being done, though. Again, before this pandemic, Gallup research revealed that more than 70% of employees were considering leaving their organisation within the 2020 - with 35% of all workers stating that they’ll consider leaving if certain career progression requests aren’t met and 44% stating that they aren’t actively looking, but that another company could tempt them away with a good offer. And even more of the workforce had no concrete dedication to their role or their company.

 

What can HR do to retain staff?

These damning statistics showcase that firms hadn’t been doing enough to retain workers. Gallup states that 71% of executives agree that employee engagement is critical to company success yet 70% of employees are actively disengaged in the workplace, despite the fact that highly engaged employees are 75% less likely to be looking for a job. So, how can firms get better at employee engagement?

The first step to ascertaining this is to work out what engagement is. Gallup states that engaged employees are "those who are involved in, enthusiastic about and committed to their work and workplace". So, cultivating purpose, connection and attention are areas in which HR must improve. One of the keys to engagement, which encompasses all of the above, is appreciation; Hubspot data reveals that 69% of employees state that they’d work harder if they were better appreciated, whilst 79% of people have quit a job due to a lack of appreciation from a boss, according to Global Studies. It’s also a simple thing to action. Regular performance reviews, town halls, progress reviews and ensuring that managers are an active presence in the day-to-day lives of their employees will make a big difference.

 
 

“I find in HR, we are always talking about how to keep employees engaged and the benefits of keeping employees in post longer,” states Emily Hawkins, Group People Director at internationally renowned advertising agency M&C Saatchi. “I have found the best way to keep employees engaged is to recognise the things that are important to them. We encourage managers to ask questions about employees personal goals for the year, as well as their professional ones. This has brought about conversations about things that we might not have known before. If you support an employee through the things that are important to them in their lives both inside and outside of work, they will in turn feel valued, and no doubt give the company their very best.”

 
 

Flexibility

The second essential element of retention is flexibility. This is something that New Era HR Director Anna Lloyd recently told HR Grapevine; she realised the significance of increased flexibility in the modern workplace transformed her view of retention. “A couple of years ago, we had two employees with children leave the company to go and work for different companies that offered flexible working. We didn’t at the time, but I realised that it was an important policy. So, we trialled flexible hours – not everyone was on board, but I explained to heads of departments that if we didn’t roll this out, we’d lose people. In this current ‘war for talent’ other companies were going to win. Everyone agreed and the trial went very well, so we rolled it out permanently,” she said. A survey of workers from TINYpulse also evidences the need for flexible working policies; it found that companies the support remote working have 25% lower employee turnover then companies that don’t. (And of course, with schools closed and life currently changed, flexibility will be a big boost for workers).

 
 

Wage increase

Finally, whilst wage increases fail to feature on the top of the list of most-requested employee perks, financial compensation still plays a major part in incentivising and retaining workers. 35% of employees would consider leaving if they weren’t given a rise whilst a 20% increase in salary could tempt 44% of workers to quit their job, even if they weren’t planning on leaving, according to Gallup.

In addition, The Society for Human Resource Management, in a job satisfaction survey, found that 92% of employees agreed that compensation held at least a significant place in any decision on staying or leaving a job, forcing more than half (55%) of employers who are experiencing difficulties in retaining employees over the past 12 months to increase staff salaries, according to research by The Chartered Institute for Personnel and Development (CIPD) and The Adecco Group. The Labour Market Outlook report, which surveyed 2,001 employers, also found that 30% of respondents struggling with staff retention in the past year have raised salaries for the majority of staff, compared to 25% who are only raising wages for key employees. Around 42% of respondents have not raised salaries at all despite rising retention difficulties.

 

Toxic cultures

Whilst each of these three elements are statistically proven to have a marked effect on employee retention, no one thing is going to dissuade a worker from quitting a toxic culture. CMSWire data suggests that up to 54% of workers feel motivated to leave their role after identifying a toxic work culture, whilst a significant 58% of employees would trust a stranger more than their own boss. These statistics prove that there is no alternative to a well-rounded and culture-centric HR strategy. As CEO of Bojoko Toni Halonen states, the essential step is putting yourself in the mindset of the worker. He says: “The Bojoko founders asked ourselves what sort of company we would like to work for, and what sort of culture would allow us to reach our full potential. Our staff retention is almost unrivalled in our industry. Over the past four years we have only lost one employee to another company in Malta where we are headquartered. This has brought consistency to the business and has also saved substantial recruitment costs.”

So, whilst it might not be a top priority right now, retention, when the economy recovers, and business can be conducted in a more usual manner, stats and experts suggest that it should be top of HR’s agenda. It is, as Bersin says, the way business will recover.

 

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