This article delves into the reasons behind the escalating attrition rates and provides a comprehensive set of strategies that organisations can adopt to enhance employee retention, foster a positive work environment, align employee aspirations with organisational goals, and ultimately drive long-term business success.
In today’s competitive business landscape, employee retention has emerged as a critical concern for organisations worldwide. The rapid increase in employee attrition rates, has forced companies to reassess their strategies for retaining top talent.
Frustrated with talented employees exiting the company?
Well, you’re not alone!
Employee attrition has more than tripled in India, from 6% in 2020 to a staggering 20.3% in 2022. It translates to companies losing a significant amount of their valuable talent and resources.
The pandemic and its aftermath have not helped matters. Retaining employees is a more significant challenge today.
What can companies do?
Since hiring costs are more than double that of retaining an employee, employee retention strategies need a revisit. But before we dive in, let us take a moment to understand what underlines the need to exit a company. It is often said that one leaves the employer, not the company. Is it true in today’s scenario?
Why does retaining employees fail?
The great resignation is upon us, with companies scrambling to retain their top talent. A recent workforce outlook for 2023 showed that 38% of the respondents in India have worked for less than two years in their role, but 86% of respondents across all age groups, industry and seniority levels planned for new career prospect.
The pandemic has significantly hastened the trend. Increased workloads, stress, and the reality check that the pandemic brought into people’s lives have resulted in employees redefining their priorities. The focus has shifted to a need for a healthy work-life balance, flexible work arrangements, and work from home.
Having tasted success working remotely with the added advantages of breaks at will, avoiding the long commute, and working from anywhere, employees are not too keen to revert to work from the office routine. As companies returned to the traditional mode of — work- a from-office organisation, the employees’ altered priorities resulted in the exodus of employees.
However, factors other than the pandemic and its aftermath impact employee retention. Lack of engagement, feeling undervalued, and not being paid enough, coupled with the after-effects of the pandemic, have contributed to the wave of resignations being witnessed.
The 7% inflation rate has further added to the employee woes nudging them to switch jobs to keep up with the cost-of-living challenges. It is important for employees to feel that their work matters and that they are instrumental in the company’s success. They also want to be compensated fairly for their efforts.
To reduce the attrition rate, the organisation must create a positive work culture that offers equal opportunities, is inclusive, and fosters a sense of ownership.
Let us now look at a few strategies that one can incorporate to help improve employee retention in 2023.
Successful Employee Retention Win-win Strategies
Formalise an onboarding process
It is important for an employee to feel wanted and at home. Joining a new place of work can be daunting. Companies need to draft a formal structured onboarding program, to induct employees into the company. New employee experience is critical in impacting their decision on the length of their stay in the company.
The induction process should be designed to introduce new employees to the company’s culture, values, mission, vision, and operations. Ensure the candidate has access to the tools and resources to settle into their job well and have their KRA well defined.
In a larger set-up, employing the ‘buddy system’ is an excellent tool to get new employees well inducted into the system while giving them a go-to person.
Help employees connect with the company’s mission
Companies need to focus on helping employees connect with the organisation’s mission, vision, and values. It is an important step for new and existing employees and is essential to keep employees aligned with the organisation’s goals while instilling a sense of belongingness in them.
It requires a top-down approach where the employees see it reflected in the behaviour of each employee and across the leadership. As employees emulate what they see rather than what they are told.
Promote work-life balance
Work-life balance makes for a healthier and emotionally balanced individual, which in turn improves the person’s productivity. Thus, companies that encourage and foster work-life balance experience higher productivity and lower attrition rates.
A great example is Canon having a 6.00 pm pens down system off ritual where the central network freezes all systems at 6.00 pm with a message for employees to put their pens down (switch off their computers) and go home. Companies like KOHLER engage in crafting out time during the day to encourage employees to stretch & exercise to avoid issues of extended working on their systems.
Offer development opportunities
A workforce learning report in 2018 found that 93% of employees would stay longer at a company if they invested in their careers. Investing in employees’ careers is vital for long-term retention. Companies must recognise that constant change is a reality of today’s business landscape.
Skilling, reskilling, and upskilling employees through training programs and mentorship opportunities not only make employees feel valued but also give them a reason to stay and grow within the organisation.
For best results, a company should employ a two-pronged approach one that provides an opportunity for the employees to hone their skills or acquire new skills at their own pace through online resources, the other that is more formal and structured and designed for a specific objective – reskilling or upskilling.
Acknowledge employee contribution
A study found that employees were 2x as likely to apply for a job interview if they did not receive validation for their work. Acknowledging and rewarding employee achievements by providing incentives such as bonuses, promotions, and public recognition can help boost employee retention efforts. Timely objective performance reviews, rewards, and recognition are two tools to organise employee contributions.
Foster cross-functional collaboration
Streamlined and effective operations require the organisation to work like a well-oiled machine run by a team of people who work in sync. This requires people across departments to respect each other and their work with an understanding of each other’s work and challenges.
The perfect route to build team spirit, understanding their and others’ role in the organisation, collaboration, and promoting respect. It involves bringing employees from different disciplines together to work on projects and initiatives.
Provide recognition for innovation
Recognise and reward employees who come up with innovative ideas that contribute to the company’s success. It promotes organisational growth and motivates employees, encouraging them to better their best.
For best results recognition needs to be at different levels right from small efforts to pathbreaking efforts all should find a mention and a pat on the back.
Provide job security
Offer job security by providing clear communication and support to employees during times of change. Be clear and honest with your employees, in times of stress they are quick to sense deceit resulting loss of confidence. Supporting employees through uncertain economic periods can help them become loyal to the organisation, leading to higher retention.
Promote work satisfaction
Create a work environment that promotes open dialogue and allows employee feedback to flow easily. Having an open-door policy and tools to capture feedback that saves the employee from being put in the spot is important to identify issues early on and prevent them from being unsurmountable. Encouraging employees to provide feedback on their work satisfaction helps an organisation improve the work environment making it a healthy and happy workplace.
Encourage employee autonomy
It is important to empower people if you want them to take ownership beyond their work and extend themselves. It requires giving employees the authority to take independent decisions. For this to work effectively it is important to build a framework within which they can take decisions and coach them on the same while aligning them with the company goals and vision.
Encourage professional networking
An essential tool for learning and self-validation. Connecting with peers and industry experts, such as attending conferences or participating in professional associations, to help them stay updated with market developments and learn from others to build their skills and network while assisting them in validating their expertise in the market.
Provide a clear career path
Establishing a well-defined career path is crucial for employees as they progress within an organisation and navigate their personal lives.
It is essential for employees to have clarity regarding their professional trajectory. Therefore, managers play a vital role in investing time to map out and guide employees in understanding their growth opportunities and potential outcomes.
A recent survey conducted among departing employees revealed that a significant 54% of them were uncertain about their prospects for promotion and lacked a clear understanding of their career path. This lack of clarity significantly influenced their decision to leave the company.
By providing a transparent and well-communicated career path, organisations can empower employees, enhance their commitment, and contribute to their long-term retention.
Providing the right compensation
Creating a fair and competitive compensation strategy is essential for any organisation, while not everyone can be the top player in the market one has to understand that it is an important component. It is equally vital to offer a comprehensive compensation package that includes benefits like health insurance, retirement plans, and leave policies.
Research shows that compensation is one key reason why employees choose to leave their jobs. Therefore, companies must strive to provide compensation within the average salary range for each role, aligning with market trends and industry standards.
By offering a fair compensation package and supplementing it with an excellent work environment, companies can attract and retain top talent, fostering employee satisfaction and driving overall business success.
Employee retention plays a pivotal role in determining the success of any organisation. When companies implement strategies that effectively retain their workforce, they cultivate a positive work environment that fosters loyalty and commitment among employees, encouraging them to stay for the long term.
Actively listening to employees, addressing their concerns, and ensuring their ongoing satisfaction and engagement are crucial elements in achieving this goal. By adopting a comprehensive approach to employee retention, organisations can not only enhance their productivity but also reduce the substantial costs associated with high turnover rates, ultimately paving the way for long-term business success.
In today’s dynamic and competitive business landscape, organisations are increasingly recognising the significance of retaining their valuable employees.
Rather than constantly recruiting and training new staff, companies have realised that retaining experienced and skilled employees is a more sustainable and cost-effective strategy. By implementing retention strategies, companies can create an environment where employees feel valued, supported,
About the Author
Ratish Pandey is a leading Business Coach & certified Executive Coach, passionate about unlocking potential, empowering businesses, and mentoring startups. A voracious reader and mountain enthusiast, he thrives on tapping into the untapped potential of his mentees.