2021 has seen people quitting their jobs in record numbers. For some, the pressures of COVID-19 have been too much leading many to seek new employment opportunities. Employee churn or turnover is never welcome to businesses. It creates disruption, added costs and can be an unwelcome distraction from the real strategic priorities. It hurts even more when it’s your top talent that decides to leave the business. In this article, we explore why your talent makes the decision to leave and how you can put in place an employee development plan that will significantly boost employee loyalty.
First, if you’re waiting till the exit interview to find out why people are leaving, it’s too late. Employee engagement is something that needs to happen 52 weeks of the year; if you’re not engaging with your teams, there’s a very good chance you are completely out of touch with how they’re feeling about working in your organisation. It goes without saying that employee retention is important; demand for the very best talent has always been fierce, but in 2021 there’s a talent shortage in sectors such as IT and Technology. In a world where ‘Digital Transformation’ is the business imperative, highly skilled people can be poached by other businesses who offer superior pay, benefits and flexibility. Money talks after all.
Interestingly enough, Deloitte carried out research into the key reasons why people leave an organisation. They identified what they call the ‘Turnover Red Zone’. According to their research, employees with less than two years on the job expressed the strongest turnover intentions. If you can keep people beyond two years, you have the best chance of these people having the intention to establish a long-term career with your company. You’re probably thinking “just how can we get them past that two-year barrier?”
Can you afford 6-9 months' salary in training costs?
When key people do leave, it can be costly to the organisation. It is estimated that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average. For a manager making $60,000 a year, that's $30,000 to $45,000 in recruiting and training expenses. The costs of employee turnover goes beyond this — there’s the impact of lower productivity and the costs of recruiting and training replacements. It also has a cultural impact — new employees can take several months to bed-in and get into a productive workflow with their colleagues.
But this is more than just a cost issue. Organisations who put in place employee development strategies not only achieve a better retention rate, they also see increased performance, better productivity, higher employee morale and a higher standard of overall work. In the Deloitte research we mentioned above, employees value meaningful work over retention initiatives and in their survey - respondents who reported their companies use their skills effectively are more likely to report that they plan to stay with their current employer.
A majority (42%) of respondents in their survey who had been seeking new employment believe their job does not make good use of their skills and abilities. A lack of career progress and a lack of challenge in their jobs was also cited as the top two factors influencing their career decisions.
Therefore, employee training and development is not something that can be left to chance. Today’s breed of employees are seeking more than just a salary or job security. They are looking for career progression, skills development and career development. They seek employment experiences where the employers’ goals and their goals align. You’re going to need to take their learning and development seriously. That means providing ongoing education, employee training and clear paths for advancement. There’s two ways to think about training and development. There’s the employee training programs that are essential to carry out a person’s job well and there’s the skills they are personally interested to gain as part of their own perceived development. In practice, you’re likely going to need to deliver both to keep people loyal. This will help people feel valued and invested in your organisation.
You could deliver the training internally though an online learning platform or a number of highly innovative businesses have created a ‘training bursary’ that lets people choose from a large variety of courses from external providers. If you are going to use an online learning portal, it makes sense to allow people to learn at their own pace. That way they can fit in essential modules around their workload, dialling up their training and development time accordingly.
It’s time to fuel people’s ambition. Make them and their career feel important. Recognise them publicly so they understand just how important and valuable their talents are to the organisation. Give them additional work opportunities and clear sight of professional development and employee progression. This could be in the form of secondment opportunities or even a seat on a steering group somewhere in the organisation.
A key facet of your employee development strategy is leadership.
When it comes to retention, employees really believe that leadership matters. According to Deloitte; “A workforce is far more engaged and committed when it trusts its leadership, receives clear communications about corporate strategy, and believes its leaders have the ability to execute on that strategy. Workplace culture is essential here. Your leaders set the tone of culture from the top down. Do your employees support your long-term vision and the purpose of the organisation? Do the values of your organisation align with those of your people? In bureaucratic organisations, strict rules and protocol govern the way things work in a command and control style. In flatter, more entrepreneurial organisations, leaders often have an open-door policy, giving your most important talent real access to leadership and a place to ask questions, share concerns and proactively put forward ideas that strengthen company strategy.
As part of your employee development strategy, keep open lines of communication with your teams and individuals. This could include giving employees regular opportunities to provide feedback, both inside and outside of their formal performance reviews and appraisals. Make it easy for employees to flag when they need support and help. Some people are natural extroverts — they wear their heart on their sleeve and share anything and everything that’s on their mind. In contrast, others will tend to bottle things up and may lack the confidence to challenge management when something is wrong. These are the people who could slip through the net — you might overlook their gripes or workplace problems and before you know it, they’ve handed in their notice to leave the organisation.
Therefore, give people multiple ways to provide feedback on the things that matter. Employee engagement platforms like Jemini allow employees to submit feedback confidentially, allowing you to glean insights that would otherwise be invisible inside the organisation.
Finally, don’t forget about the benefits and flexibility that can encourage your employees to stay long-term. Tenure related bonuses and share options can be incredibly powerful motivators to commit to a company for the long term. It creates a real sense of ownership and gives them a real stake in the company’s fortunes. And with the current boom in hybrid working, ensure you offer the right kind of flexibility that accommodates people’s lives outside the workplace. Working from home can mean reduced commuting, more time with family and more time for health and wellness related activities.
In conclusion, retaining your most valuable people isn’t rocket science. Build a workplace that cares for its people, pays them fairly and shows them a real investment in training and personal development then you’re on the right track. Take a test and learn approach — engage with your people and discover the levels of loyalty that will best work for them.