Wondering how to keep workers from leaving? You may want to skip these steps
In today’s tight talent market, holding on to valued employees is a priority for many organizations. The number of companies that say they’re concerned about staff retention rose from 59 percent in 2018 to 66 percent this year, according to a PayScale report.
The methods some organizations are using to encourage employees to stay, however, may not be as effective as they think.
Recent data, in fact, indicates companies’ retention strategy efforts can profoundly misfire — yet that doesn't have to be the case.
While retirement, a spouse being relocated and other factors will inevitably result in some employees giving notice, a HubSpot analysis of seven years of labor data found employers could have prevented more than 75 percent of the reasons that prompted workers to leave their job during that period.
If your organization is relying on any of the following practices to retain employees, it may want to reconsider its approach:
Only providing feedback in annual reviews
Most professionals — 87 percent, according to a 2018 Korn Ferry survey — have a once-a-year employee performance review with their boss to discuss how they’re doing. Ninety-six percent of employees, though, find real-time feedback and ongoing discussions about their work more motivating.
Research has also shown workers who don’t receive more frequent feedback could be more likely to leave the company — another reason to replace, or at least supplement annual employee performance reviews with regular contact. A TINYpulse survey found more than a fifth of employees who didn’t feel recognized when they did great work had interviewed for a job in the previous three months, compared to 12 percent of workers who felt recognized. Twenty-four percent of employees who hadn’t received recognition from their direct supervisor in the prior two weeks had recently interviewed for a new position.
Making a counteroffer
Forty-four percent of employees said after giving notice their employer had made a competitive offer, according to a Creative Group survey. Thirty-four percent declined.
A counteroffer may have a temporary effect on an employee’s decision to leave; but it won’t ensure they’ll put down roots with the organization. Thirteen percent of the employees who accepted a counteroffer after giving notice say they later regretted the decision. A Robert Half survey found Canadian workers who accept counteroffers typically leave the company in less than two years.
A number of studies have found pay isn’t always what matters most to employees. Other efforts — such as enhancing your organization’s work environment — could ultimately be a better staff retention strategy than handing out a raise. An engaging work culture, for instance, that involves positive manager and colleague relationships can convince high-performing employees to remain with an organization, according to Ceridian research. For additional incentive ideas, view our blog post on other compensation options.
Giving a bonus
Two-thirds of companies plan to use bonuses to retain employees who are top performers in competitive jobs in 2019, according to PayScale. While that can be an effective move — bonuses and financial incentives earned the top spot on the list when Deloitte asked workers what would convince them to stay with their company — research indicates extra money may not have the same impact on all generations. Baby boomers rank bonuses as the most effective staff retention strategy; millennial, Gen Z and Gen X workers, however, view promotion and job advancement opportunities as the biggest retention driver.
Luckily, in addition to determining which techniques are some of the least effective ways to retain employees, research has also been conducted to identify which methods work best.
For more on how to keep employees from quitting, read our blog posts on the 3 turnover threats you can’t ignore, using employee benefits to increase job satisfaction, why employee exit interviews may be helpful — and the turnover techniques that will best resonate with each generation.