The employee turnover rate has been rising in the US. This year, the turnover rate jumped to 20% due to 37.4 million employees quitting their job for whatever reason. According to other predictions, an average of 47% of millennials are planning to quit their job in the next two years.
There are various reasons why companies fail to retain employees. Even with various retention strategies in place, employees feel that there is a lack of career development, growth, meaningful work, and inspiring leaders in the workplace.
Each employee that walks out your organization’s door costs you 6-9 months’ worth of that employee’s salary. This means that HR for companies has failed to allocate resources effectively. Using the right strategies, companies can achieve a higher employee retention rate and lower employee turnover.
Employee retention has a huge impact on a corporation’s profit margins and revenue. If there are massive retention issues, it results in lost revenue. In this guide, we’ll take a look at why employee retention efforts don’t work and what you need to do for better retention rates.
Why Employee Retention Strategies Fail
Real Causes Aren’t Identified
As we mentioned, there are different reasons why employees quit, and the turnover rate goes up. Most organizations fail to identify the real reasons behind this and don’t solve the actual causes through their employee retention strategies.
This usually happens because of poor turnover information and data collection. Most of the information collected to help prevent future employees from exiting doesn’t tell the truth about why previous employees left.
Organizations can invest in surveys and interviews that will help identify why their employees quit and what was the key motivator. Most employees also leave due to personal problems, in which case organizations can’t do much.
No Effective Measures for Turnover Mitigation
Managers and leaders also fail to find a way to detect and show if their prevention and turnover mitigation methods were effective. There is barely any proof in most corporations that displays their efforts to reduce turnover.
Once they implement a strategy or use a tool, they continue to use it for years without any way to measure its effectiveness. Without any assessments, it becomes harder to measure whether an employee retention strategy is working. Plus, managers also aren’t able to effectively choose between different tools or methods as they don’t know the success rates of each one.
No Motivation or Incentives for Employees
Most employees need more motivation than just their basic salary. The salary is often the lowest driver of employees quitting. Employees want other benefits along with their salary.
If, as an employer, you are not providing growth opportunities and other benefits to your employees, they will look for something better. Most employees want retirement benefits, flexible hours, and leave benefits. Furthermore, you should ensure that salary increases keep up with the rising inflation in the country. If you fail to offer these, your business might have to deal with a competitive disadvantage.
Employees also want health benefits, which is often a deal breaker for many. Even a small business can offer health insurance as it’s cost prohibitive. Employees also need a work-from-home option with flexible hours, especially after the COVID-19 pandemic.
No Way To Identify “Flight Risk” Employees
In most organizations, they aren’t any single processes that help identify “flight risk” employees. These are high-value workers who are most likely to quit. Identifying these employees early on is extremely critical so you can focus the most effective retention efforts on them. You would also have sufficient time to help mitigate the reason why they’re leaving.
Improving Employee Retention and Job Satisfaction
With each new employee you hire, there should be a successful and effective onboarding process. You should let your employees know about their job, career growth, company culture, and how they can thrive in your organization. They should be aware of the training or support available during their tenure.
A great way to improve the retention rate is through mentorship opportunities. Your new employees, along with existing staff, should be able to benefit from a mentorship program. This will improve your team’s overall job satisfaction.
Employee Compensation & Perks
Employees need to get competitive compensation for their efforts. Regular salary appraisals and inflation adjustments are key factors in employee retention. You can also compensate them in other ways, including retirement plans, compensatory leaves, and healthcare benefits.
Additionally, perks are a great way to bring new hires into your new place and motivate your current staff. Remote work and flexible hours are the best perks for most professionals.
Training & Development
When you start providing your employees with continuous feedback, they’ll realize that you value their growth. All organizations should help upskill their employees, teach them how the latest technology works, and invest in their professional development. When an employee sees that they have career growth potential in a company, they will stick around.
Rewards and Recognition
Who doesn’t like rewards, appreciation, and recognition for their efforts? If an employer shows gratitude towards their employees, it helps bring the team together. It shows employees that their work is valued in the company and that they can continue to put their best foot forward and go the extra mile.
According to the renewable energy headhunters at Whitham Group, employee retention is an important business metric. If a renewable energy company wants to gain more investors, it must invest in employee retention and turnover rates.
They are helping companies find candidates that meet 90% of the job requirements thanks to their 24-step process, which has been highly effective in the last few years. Whitham Group’s renewable energy recruiters can help you improve your retention rate.
Contact them today.