Retention is turning into a huge issue for companies of all sizes. What can businesses do to hang on to the talent they have attracted?
How many times have you been told that there’s a global talent shortage, and attributed your poor retention to it? Enough times to be bored and frustrated, we’ll bet. Worse than being told about this problem and offered no solution is the fact that the talent shortage doesn’t really exist – you’ve been fooled.
The truth is that there have never been more people available for work – the population is larger than ever before, and the world’s workers are far more educated and technically skilled than they used to be. You might struggle to accept this, but the reality is that there are plenty of people to do the work that needs to be done. They’re just working somewhere else.
Think that your exit surveys tell you all you need to know, and that you’ve got a handle on it? Sadly not. Around 80% of exit studies are conducted poorly; 40% of what an employee says in an exit survey will be inaccurate if the survey is completed on or before the employee’s last day. When was the last time you reached out to a previous employee two weeks after they’d left?
41.4 million U.S. workers voluntarily left their jobs during 2018. With a total workforce of around 150 million, this adds up to roughly 27% of the workforce: 27% of employees found a better offer elsewhere, and left their previous employer willingly. Let that sink in for a moment.
The impacts of such poor retention should be obvious to any organisation; the U.S. lost $617 billion to employee turnover in 2018 alone. Of this figure, the Work Institute estimate $469 billion was avoidable. Expected turnover can’t be used as an excuse either, as retirement and involuntary exits are down by 37% and 35% respectively. At the current rate, the total cost of turnover to employers could be as high as $800 billion by 2030.
Reasons for employee turnover have been analysed across the previous six years, and the results are somewhat depressing from an employer viewpoint. ‘Job characteristics’ has seen an 81% increase as a reason for quitting since 2013, followed by ‘work environment’ at a 53% increase and career development at 32%.
In 2018 and for the 9th consecutive year, ‘lack of career development’ has been given as the top reason for moving on. Drilling down into this answer provides some insight into exactly what employers are getting wrong; the type of work assigned, lack of growth and opportunities for development, and returning to education were the three most common subcategories. Alarm bells should be ringing for employers everywhere – why aren’t we offering employees the chance to do varied, engaging work? Why aren’t we promoting people? Why aren’t we offering training and continuous development as part of a job role?
Looking at where in their tenure employees are saying goodbye gives us a clue into where employers are getting things wrong. Of all turnover, 38% is accounted for employees in their first 12 months in-role. First-year turnover statistics themselves are worrying; 43 out of 100 employees will quit within their first 90 days. This tells us that either the new employee is a poor cultural fit, or that the job was mis-sold to them and has failed to live up to expectations.
The fix for poor retention
Hiring the right employee for the role is the only way to boost retention long-term, particularly when it comes to business-critical hires. Cultural, behavioural, technical and emotional fit are crucial, both in terms of productivity and team morale as well as for employee satisfaction. Your recruiter should also ensure complete transparency throughout the recruitment process and focus on the candidate experience – what’s the point of downplaying some aspects of a role, only for the employee to quit when these come to light later? It benefits no one, and in this competitive talent market, the employee will simply walk into another, more suitable role.
Employee fit is one of the main things we focus on when sourcing candidates for our clients here at Solutions Driven. Our unique 6S Process guarantees that candidates are a match for all aspects of a role and company, so our shortlists provide hiring managers with the best choice possible. By being transparent and straightforward with candidates, our Talent Delivery Specialists also ensure that the role is a fit for them – our bespoke 6F Process for candidates (Fit, Freedom, Family, Fun, Fortune and Future) secures their buy-in to a role from the get-go. Retention matters, and we’re confident that we can help improve yours.