Losing experienced staff hurts. Not only is there a drain on organisational knowledge, but replacement costs can exceed 200% of their annual salary. According to the Australian Bureau of Statistics, 2.3 million people left or lost a job in 2023. Out of this number, a third left their jobs for a better opportunity or just wanted a change. While there are various reasons why employees leave the workplace, the top reasons are usually within the employer’s control. Instead, the problem is with replacing highly-trained employees since related This is why employers need to know how to improve employee retention so they can avoid such costs.
In this article, we’ll highlight the top reasons why people leave their jobs and why people stay. We’ll also be disclosing eight ways to improve employee retention and its effect on organisations.
The Wall Street Journal reported that 44.5 million Americans quit their jobs in 2023. This is a better number compared to the 50.6 million people who resigned in 2022. The top reason why they quit their jobs is that they sought higher compensation. The other reasons are:
With the reasons above, it can be deduced that employees who feel undervalued and unappreciated will look for opportunities elsewhere that provide what they are looking for. Compensation is important, but millennials favour opportunities for learning and 91% hope for rapid career progression.
Other reasons why people will choose to stay in their current workplace include:
Employee engagement is a good measure of job satisfaction. This refers to an individual’s level of involvement and enthusiasm for their work. We’ve got an excellent article that gives tips on how to improve employee engagement in your workplace.
Every year, businesses in the US lose $1 trillion due to voluntary turnover. That’s because there’s more to it when an employee exits a company. Businesses face other costs, including:
Here are eight of the best ways to retain employees, save your team time and money, and ensure you get the most out of your employee investment:
It all starts with choosing the right individuals to hire. Although this means being meticulous in the recruitment process, it’s also important not to let the employee jump through hoops and loops before proceeding to the next step. The best way to do this is to be thorough during the interview process to understand if a candidate possesses the right skills for the role. This also helps avoid mismatches in the hiring process.
The onboarding process does not end with welcoming the newly hired candidate into the office. Instead, it should be a continuous process with proper training and development so employees have the support needed in their roles. Only two percent of companies practice an onboarding process that lasts up to one year. But this is the recommended practice to ensure the employee gets to prove “if they’re fully productive.” This transitions them into seasoned employees of the company.
Interestingly, 76% of employees want increased socialisation during onboarding (with a mentor or onboarding buddy aside from their leader). 56% ask for a mentor on day one.
This is a way employers can show that they care about the wellbeing of their employees. Health insurance, gym memberships, coffee and lunches are great ways to keep employees engaged and make a more favourable comparison when employees are considering a move. ESOP (Employee share) schemes are also great for retaining employees long-term and increasing their perceived investment in the organisation.
Lack of recognition is among the top three reasons why employees quit their jobs. Another study found that 21.5% of employees who did not receive recognition for their hard work have attended job interviews. Gallup also found that recognition helps increase productivity and keeps loyal employees. Building a feedback and employee recognition culture can do wonders for any organisation. Employees want to feel appreciated and valued for their contributions to the company. If they do not get this recognition from their current employer, they are likely to look for validation elsewhere.
The pandemic has shown that remote work is possible. And while there are companies that have implemented return-to-work mandates, others continue to offer flexible work arrangements. This study found that 66% of workers would immediately start looking for a new job if their option for remote work was taken away from them. Remote work has given individuals the ability to perform their jobs without the need to commute or relocate to another city. By offering flexibility, organisations can support employees and give them reasons to stay loyal.
Another reason why employees leave is because they do not have career growth in the organisation. Employees want to have career opportunities in their workplace. It gives them a goal to work towards and has a motivating factor for staying. Managers can sit down with the employees and talk to them about how they can achieve these goals and other opportunities that are available to them.
Employee development is one of the important ways to retain top employees. Providing opportunities for skill development in the organisation can help encourage employees. And whenever necessary, prioritise internal hiring and promotions to reward employees. This gives employees enough reasons to stay in their current workplace.
Mentorship programs can help improve employee retention in any organisation. Since employees gain guidance from more experienced individuals, they get an understanding of how they can grow in the organisation. Mentoring also gives them support and a sense of belonging, which can be enough reasons to stay.
Often overlooked, mentoring programs based on collaboration can be a great way to provide employees with a deeper understanding of how the organisation operates and can provide them with exposure to other departments or programs where they may wish to move in future.
A mentorship program can be a great way to keep employees motivated and in line with your organisation’s goals. If you plan to launch one, the best way to ensure its success is to make the right mentor-mentee matches. Brancher offers a unique mentoring program with science-based matches. Book a demo today to learn more about how we can help improve employee retention in your organisation.
Resources:
1. Australia Bureau of Statistics. (2023, June 30). Job mobility 2023. https://www.abs.gov.au/statistics/labour/jobs/job-mobility/latest-release#left-or-lost-a-job.
2. Pugh, Marie-Reine. (2023, January 25). BambooHR. These 10+ Onboarding Statistics Reveal What New Employees Really Want in 2023. https://www.bamboohr.com/blog/onboarding-infographic.
3, Dickson, George. (2023, October 26). Bonusly. What You Need to Know About the Cost of Employee Turnover. https://bonusly.com/post/cost-of-employee-turnover.
4. Hufford, Austen; Guilford, Gwynn. (2023, July 6). The Wall Street Journal. Americans Have Quit Quitting Their Jobs. https://www.wsj.com/articles/americans-have-quit-quitting-their-jobs-4feda9bb.
5. Gillespie, Lane. (2023, April 3). Bankrate. Survey: 56% of workers plan to look for a job in the next 12 months. https://www.bankrate.com/personal-finance/job-seekers-survey/.
6. US Bureau of Labor Statistics. (2022, September 22). Employee Tenure in 2022. https://www.bls.gov/news.release/tenure.nr0.htm.
7. McFeely, Shane; Wigert, Ben. (2019, March 13). Gallup. This Fixable Problem Costs U.S. Businesses $1 Trillion. https://www.gallup.com/workplace/247391/fixable-problem-costs-businesses-trillion.aspx.
8. Maurer, Roy. (2015, April 16). SHRM. Onboarding Key to Retaining, Engaging Talent. https://www.shrm.org/topics-tools/news/talent-acquisition/onboarding-key-to-retaining-engaging-talent.
9. McCain, Abby. (2022, November 13). Zippia. 27 Essential Employee Recognition Statistics [2023]: Need to Know Facts for Managers and HR. https://www.zippia.com/advice/employee-recognition-statistics/.
10. Li, Lori. (2022, April 8). TinyPulse. 17 Surprising Statistics about Employee Retention. https://www.tinypulse.com/blog/17-surprising-statistics-about-employee-retention.
11. Gallup. (2016, June 28). The Importance of Employee Recognition: Low Cost, High Impact. https://www.gallup.com/workplace/236441/employee-recognition-low-cost-high-impact.aspx.
12. Travis, Ben. (2020, March 19). Bonusly. What is Remote Work, and Why is it So Popular?. https://bonusly.com/post/what-is-remote-work.