Competition in business is something that any manager must be prepared for, however, competition is progressively extending to matters far beyond who has the better product or service – companies are now identifying a skills shortage in the workforce and coming for your best talent in an effort to increase their competitive edge. Skilled employees are the backbone to any successful business and retaining top talent in a competitive business landscape is becoming increasingly difficult.
In this article we explore what it takes to retain top talent in your company.
How retention benefits employers
Employee turnover is an inevitable fact of business, although a high turnover rate can be indicative of deeper issues within a company. Employee turnover can be costly for businesses as well as impacting productivity and morale – ensuring a stable and talented team is one of the best ways a boss can “future-proof” their company.
Why is retention an issue?
Employees are citing several reasons for their departures and whilst we can agree that a small percentage of turnover is unavoidable, high rates in the Tech-Software and Media industries, for example, can be attributed to a number of reasons with many being preventable. With the Tech-Software industry rapidly developing and start-up businesses constantly emerging, companies are becoming more competitive with their offers with employees willing to undertake new opportunities. LinkedIn data has shown that 49% of departing employees left for jobs within the same sector, indicating the losses are likely due to these competitive offers.
Furthering this, the Media Federation of Australia lists a 27.9% “regrettable loss” in the staff turnover section of the 2019 Industry Census Report, with 15.3% having left the industry and 12.6% moving to a competitor or within the parent group. With a worldwide employee turnover average for companies coming in at 10.9%, these numbers raise alarm bells for many employers.
A common misconception is that employees constantly need to prove they are “worth their salt” to their employers and while this is somewhat true, this relationship is a two-way street and mutual satisfaction should be the driving force.
How retention benefits employees
Employees who feel cared for have a better quality of life and a greater sense of work-life balance. As well as this, a strong sense of belonging can be felt by employees who stay within a company and career advancements give greater meaning to their position.
How to retain talent
To “future-proof” your company and retain highly valuable talent, there are some simple yet effective measures which can be implemented almost immediately in any business.
The most obvious and simple measure is effective communication between managers and employees. Organisations must make their employees feel heard and secure when voicing their opinions or concerns, otherwise discussion can be stifled by fear of being labelled a “complainer”. LinkedIn found that after explaining effective communication to managers, there was improved workplace morale and retention, further proving the impact a conversation can have.
Whilst promotions are not always feasible, Nielsen discovered that moving employees laterally improved retention rates and was nearly as effective as a promotion. This is crucial as we saw the number one reason for departure was due to a lack of career development. This further invites the “grow your own” method of hiring early-stage professionals who are either newly graduated or still studying in order to invest and create a tailored work team armed with the skills gained specifically for your business. When asked about the importance of hiring early-stage professionals, Robert Bell, Founder and Chief Scientist of Experimentary, said, “I think it is a win-win situation being able to tap into early stage professionals. They learn in a real-life context and you get the benefit of not just being able to more easily afford them, but they are usually very eager, hard-working and completely up-to-date on the latest technology.”
Employees also feel a remarkable sense of insignificance regarding rewards and recognition for their performance, with 32% referencing this when departing from a position. Deloitte outlined the need for better alignment between an organisation’s strategy and rewards given to employees in their 2019 Global Human Capital Trends report. As well as this, companies must focus on offering their employees the “right” benefits; take Change.org for example, who implemented an 18-week paid parental leave scheme for every employee. Their reasoning was simple – a parent who reluctantly returns to work is inevitably distracted and potentially resentful, making an unproductive team member and forcing them to search for new opportunities with greater benefits.
All in all, companies need to share their successes with the people who made it possible. Robert Bell reinforces this in saying, “I think the company has to build in ways that the employees benefit. Otherwise they see the success but don’t share in it, and that is disheartening. Rewards such as flexibility in work, new roles and authority, and of course where possible more tangible things too.”
Bell further outlines the need for employee satisfaction and how companies play a vital role in this – “We value the employees we have, and because it can be hard to find the “right” ones, when you have them, you have to cherish them. Realise they will reach a point where they can get more money elsewhere and try and build the job into something that makes it worth staying.”
To future-proof your company and further your talent pool, sign up to Ribit today.