Employee turnover is costly, it affects the performance of an organisation, and it becomes increasingly difficult to manage as the availability of skilled employees continues to decrease. There is even greater pressure on small businesses which have to compete at times for talent against larger organisations.
At times it is not only difficult for business to find the right employees but it can be harder to retain them in the long term. The average rate of employee turnover in Australia is 15%, but my local (Kalgoorlie-Boulder) experience is that a percentage rate of mid – high 20’s is more realistic. A lot of businesses don’t actively keep track of their turnover or reasons that employees leave, but how can you change what isn’t measured?
According to a recent survey conducted by the Australian Human Resource Institute (AHRI) the top 4 reasons employees leave are;
- New career opportunity (56%)
- Lack of career progression / opportunities (48%)
- Better pay elsewhere (34%)
- Poor relationship with manager / supervisor (26%)
Today the immerging workforce is developing different attitudes about work and how it is designed to fit into their lives. Today’s employees may place a priority on;
- Family time
- Sense of community
- Autonomy in their roles
- Flexibility in their work
In fact in the same AHRI survey, employees nominated their top reasons to stay with an organisation as;
- Good relationship with colleagues (44%)
- Job satisfaction (35%)
- Good work/life balance (32%)
- Flexible work options (27%)
- Competitive pay & benefits (25%)
Successful organisations make it a strategic initiative to understand what their employees want and require in their workplace so that they can retain and engage their employees more effectively. Being aware of the different factors that affect employee retention makes it easier for businesses to focus on the areas that they can influence and change.
So how do you know if your employees are happy? Ask them! Annual employee feedback surveys are an extremely valuable tool to gauge the mood of the workforce. Analysis of the data can show trends of issues or positives with leadership, working hours, pay & benefits, the effectiveness of training programs, communication and culture just to name a few. There is no point in only obtaining data from departing employees, or worse no data at all, and then sitting back wondering why your business is experiencing employee churn.
“People work for money but go the extra mile for recognition, praise and rewards.”
Before you get started on implementing employee retention measures ensure that retention of employees is fully tracked and reported. It’s critical to have this measurement mechanism in place before you embark on any program to retain employees. Some effective examples of retention programs can include;
- Competitions and incentives such as feedback reward programs and recognition.
- Flexible working hours / RDO’s, allowing employees to flex their work and life around each other
- Training and development. Ranging from job-specific training, to soft skills and professional qualifications.
- Appraisal and reward systems. Appraisal processes are almost universally disliked because of the perception of extra work required, but run well they can be motivational and contribute to retention.
- Clear management and employee communication policies and plans so that employees understand the bigger picture about how they fit and why they are important.
- Bonuses and/or shares options. Additional financial compensation can take a number of forms and is a popular retention program component.
Remember… you can’t stop employees leaving unless you have a plan for them to stay!
For more information on employee retention watch our presentation below (warning * groovy music to follow, may induce killer dance moves* )
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