Have you ever stopped to think about the meaningful work lost when valuable employees decide to leave?
Retaining Top Talent
The impact on your company’s success can be significant, not to mention the financial costs involved in replacing them. As we navigate the evolving landscape of work in 2023, the importance of employee retention and culture change becomes increasingly apparent.
In the midst of a competitive job market, it’s crucial for organisations to address the challenge of retaining top talent. Surprisingly, even in the face of this competitive environment, research from Gallup reveals that 60% of employees feel emotionally detached from their work. With over half of employed workers actively seeking new opportunities, the reality of employee turnover rates increasing by 9% since 2019 paints a challenging picture.
However, amidst these statistics lies an incredible opportunity for positive change and a substantial return on investment. As we explore the dynamics of the workplace and its impact on employee retention, it’s time to delve deeper into the heart of the matter.
In this blog, we’ll uncover key insights into the current hiring market and employee sentiments. Armed with this knowledge, employers can proactively implement effective employee retention strategies. The Gallup report’s revelation that retention costs UK businesses reinforces the urgency for action.
The average employee turnover rate for 2022 ranged from 5.43% to 16.9%, with an overall average of 9.31% across all industries. And when considering the cost of turnover per employee, it amounts to a staggering £37,092.51 in 2023, accounting for inflation.
So, with the challenges and costs laid bare before us, let’s embark on this journey together, exploring the proven tactics that every company should know to retain their top talent and thrive in the competitive landscape of the modern workforce.
The Cost of Employee Turnover: A Breakdown
Hiring costs: Attracting the right candidate to a new job role comes with a price tag. Advertising and promoting the vacancy can be a significant expense, especially if you aim to reach the best-fit talent in the market. If you decide to utilise a recruitment agency, be prepared to pay around 10-20% of the job’s annual salary.
Onboarding and training: Once you’ve found the perfect match for your team, the onboarding process begins. This crucial step involves creating a welcoming environment for the new employee, which may include providing a well-organised welcome pack comprising their offer letter, employment contract, details of company benefits, and the employee handbook.
Loss of productivity: When a new employee joins, it takes time for them to reach the same level of productivity as their predecessor. According to Oxford Economics and Unum, the average timeframe for this transition is 28 weeks. In monetary terms, the cost of this loss of productivity is estimated at £25,182 on average.
Employee Retention: The New Focus in Today’s Workforce
In today’s workplace, employee loyalty has undergone a significant shift. Rather than blindly staying loyal to a company, employees now prioritise staying true to themselves. They seek a sense of purpose and the knowledge that their contributions and growth matter to their employers. This paradigm places immense pressure on individual leaders to adapt their thinking and approach.
Let’s explore some key insights about employee turnover and engagement:
- The average employee turnover rate for 2022 ranged from 5.43% to 16.9%, with an overall average of 9.31% across all industries.
- Gallup’s research reveals a global phenomenon known as “quiet quitting,” where workers do the bare minimum and lack full engagement with their jobs. A significant 59% of employees worldwide were found to be disengaged, leading to stress and decreased productivity.
- Despite a competitive job market, over half of employed workers expressed their willingness to seek new job opportunities. Engaged employees require a 31% pay increase on average to switch jobs, while disengaged employees would be enticed to leave with only a 22% pay raise.
- Young professionals, especially Gen Zers, reported feeling highly stressed at work, largely due to financial concerns and fears of not achieving personal goals.
- Disengaged employees are estimated to cost the global economy a staggering $7.8 trillion.
Given these findings, organisations must recognise the value of employee retention as a crucial aspect of success. Investing in employee engagement, purpose-driven leadership, and addressing the aspirations of the workforce will help create a more fulfilled and productive team.
7 Tactics to Boost Employee Retention: Empowering Your Team for Lasting Success
1. Listening & Hearing: The Foundations of Strong Teams. Create a culture of open communication by genuinely listening and hearing what your team has to say. Pay attention to their ideas, questions, and concerns, regardless of their work location. Empower your direct reports to approach you anytime, knowing their input is valued.
2. Onboarding with Purpose: Setting Up New Hires for Success. Ensure every new employee is set up for success from day one. Enhance your onboarding process to educate them not only about their role but also about your company’s culture and how they can contribute and thrive within it.
3. Leadership Training and Mentorship for Growth: Nurturing and Training Talent. Introduce leadership training and mentorship programs to foster a supportive environment. Experienced employees can mentor and guide new team members, helping them adjust, understand their progression paths, and contribute to overall employee and team satisfaction. Developing inclusive leaders is a conscious effort that yields significant benefits. By implementing inclusive practices like organising team gatherings, challenging non-inclusive mindsets and behaviours, and fostering a commitment to inclusivity, a culture of belonging thrives. When team members feel valued for their authentic selves, they are motivated to give their best effort and drive impactful results.
4. Compensation that Counts: Recognising and Valuing Your Employees. Offer competitive compensation and regularly evaluate salaries to ensure employee satisfaction. If immediate pay increases aren’t feasible, consider other forms of recognition, such as bonuses and enhanced benefits like improved healthcare and retirement plans.
5. Perks that Inspire: Elevating Employee Morale. Stand out as an employer of choice by providing appealing perks. Consider offering flexible schedules, remote work options, or stipends for home offices to support remote employees effectively. Embrace flexible work arrangements as a growing trend in the UK.
6. Wellness as a Priority: Nurturing the Whole Employee. Prioritise your employees’ well-being by providing stress management programs, retirement planning services, and fitness-related reimbursements. Fostering a healthy work environment boosts productivity and employee satisfaction.
7. Continuous Feedback for Growth: Building Career Paths Together. Replace annual performance reviews with more frequent one-on-one meetings. Engage in constructive discussions about professional goals, deliver feedback, and help employees visualise their future within the company. Build a culture of feedback and recognition to ensure employees feel valued and heard.
By combining these strategies, you create an environment where employees feel appreciated, supported, and empowered. Implementing effective change management, promoting teamwork, and acknowledging milestones further solidify your commitment to fostering a thriving workforce. Embrace flexible work arrangements and a healthy work-life balance to attract and retain top talent, even if remote work remains part of the equation. With these approaches in place, you’ll elevate your team’s resilience and well-being, propelling them towards lasting success.
Building an inclusive organisational culture revolves around fostering a sense of belonging. So, how can leaders achieve this within their teams? It begins with valuing each individual, empowering them to embrace their authentic selves. Inclusive leadership creates space for diverse backgrounds and experiences, enabling every team member to make unique contributions to the organisation’s success. If you’re aiming to elevate your team’s success and improve return on investment, reach out to our consultants today for valuable insights and guidance.
Retaining Top Talent
Explore the cutting-edge tactics, discover how successful companies attract and retain top talent, and unlock your organisation's full potential. Get in touch with our team of TPC consultants today!