You’ve scoured through applications, made it through the interview process, and finally hired the perfect candidate. They’re a standout in all the right areas. At this point, it’s easy to call it a day, but really, your job is barely half done. Long-term employee retention is one of the most important yet overlooked aspects of any high-impact workplace culture.
To exemplify this, 87% of HR managers say that employee retention is their number one priority. However, 20% of these managers say that focusing on employee retention is difficult because other tasks demand their attention and budgets. Most alarmingly, Work Institute finds that more than three in four employees who quit could have been retained. Unfortunately, these are errors that many teams make. And they can be costly.
Employee Benefits News found that the average cost of losing an employee is a massive 33% of their annual salary. What’s more, some estimates find that poor retention will cost $430 billion annually by 2030. On the other hand, higher retention rates can increase profits by up to 4x.
So, how can companies improve their retention processes? We’ve decided to dig a little deeper, offering five tips for long-term employee retention.
As is so often the case in life, first impressions make a huge difference when it comes to employee turnover.
To demonstrate this, studies show that 20% of turnover happens within the first 45 days of working at a new company. Similarly, employees are 10 times more likely to leave a job in the first year than five years down the line. Further, research by Leftronic shows that nearly one-third (32%) of employees have quit their job within the first three months due to unsatisfactory workplace culture.
As such, first impressions have a significant influence on an employee’s likelihood of remaining with a company long-term. So, what can organisations do to reverse this trend? Optimise your onboarding process.
Put simply, 69% of employees are more likely to stay with a company for more than three years if they had a great onboarding experience. Additionally, organisations with a standardised onboarding process enjoy 50% greater productivity from new employees. In stark contrast, organisations with poor onboarding processes are twice as likely to experience employee turnover
Even more notably, when an onboarding process involves digital learning, employee retention rates increase by 60%, on average. And that’s only the beginning of how L&D influences employee retention.
As always, L&D makes a big difference when it comes to long-term employee retention. Consistent learning and development opportunities are among the most decisive factors in retaining employees. For instance, 94% of employees say they would stay at a company longer if it invested in their professional development.
Likewise, 86% of millennials would be prevented from leaving their current position if their employer offered better training and development. Finally, companies that provide professional development opportunities have 34% higher retention rates.
And that’s only the tip of the iceberg. Emplify finds that 22% of employees leave their jobs to seek better professional development opportunities elsewhere. Perhaps most significantly, employee retention rates increase by 30-50% on average for companies with strong learning cultures.
The message is clear: employees crave robust and consistent learning and development opportunities and are willing to seek them out at a different company if necessary.
Everyone likes their hard work to be acknowledged. There are few things more frustrating than putting significant time and effort into a project, only for it to go completely unnoticed. Therefore, it should be no surprise that fostering a culture of recognition and feedback has a flow-on effect on employee retention.
According to TINYpulse, employees who don't feel recognised for their work are 2x more likely to be actively seeking a new job. What’s more, research shows that 79% of people who quit their jobs cite “lack of appreciation” as their reason for leaving.
Conversely, employees whose managers consistently acknowledge them for good work are 5x more likely to stay at the company. Likewise, 90% say that recognition motivates them to work harder. As the old saying goes, you catch more flies with honey than with vinegar. In this instance, it appears that positive reinforcement is the best approach to encourage long-term retention.
It is also important to note that feedback must be a two-way street for employees to truly feel valued. According to a report by Achievers, 90% of employees say they are more likely to stay at a company that takes and acts on feedback. Despite this, only one-third of employees say their company is either ‘good’ or ‘very good’ at taking feedback on board.
Further, employees that don’t feel comfortable giving upward feedback are 16% less likely to stay at their companies, according to TINYpulse. As they explain, “feedback shouldn’t just flow one way. Open communication is key to understanding the needs and points of improvement for both managers and employees.”
Ultimately, Workstars finds that teams with ‘recognition rich’ cultures can reduce turnover by up to 31%. Luckily, this is an intuitive process for everyone involved. Recognise employees’ good work and value their feedback, and they will be more productive and less likely to seek opportunities elsewhere. Simple!
When employees feel like they are connected to a larger mission, they are more likely to stay with a company for the long haul.
For starters, employees who think their company has a larger purpose than just profits are 27% more likely to stay. As TINYpulse explains, “having a sense of purpose — the why behind the what — can help your employees feel like they’re doing something meaningful beyond just a job.”
Additionally, IBM finds that 80% of employees feel more engaged when their work is consistent with the core values and mission of their organisation. They explain this, saying, “meaningful work ensures that employees’ skills and talents are being fully utilised and there is greater alignment to shared, core values.”
Despite this, only one-quarter of employees currently feel connected to their company’s mission. This disconnect shows that companies must work harder to demonstrate a clear mission statement, thereby driving engagement and creating a clear sense of purpose and belonging.
Finally, companies must focus on the employee experience to improve their long-term retention. While this might sound obvious, it is a hurdle that a surprising number of teams fail to clear.
To put this advice into perspective, research by HR Experts shows that 50% of all turnover is due to employee burnout, while a staggering 95% of HR leaders admit employee burnout is sabotaging workforce retention.
On the other hand, LinkedIn’s 2020 Global Talent Trends report finds that when companies focus on the employee experience, 77% enjoy increased employee retention, and 71% notice an increase in productivity.
To underscore these statistics, 67% of job seekers prioritise diversity and inclusion when seeking a new job, while companies that offer remote working arrangements have a 25% lower turnover rate, and millennials are 22x more likely to work for a company with a high trust culture. All of these factors contribute to the overall employee experience.
Along these same lines, 79% of employees wouldn't take a better-paying position in a company with questionable ethics (i.e. not acting against sexual harassment, creating environmental problems, and paying female employees less), according to a survey by The Manifest.
In other words, the employee experience matters. A lot. If you want to improve your employee retention rates, then fostering positive employee experiences is an excellent place to start.
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