Employees leave organizations for many reasons. Examples of those reasons are:
- Find a different job
- Retire or Semi-Retire
- To go back to school
- Angry about a work-related or personal issue and quit on impulse
- Decide they no longer need a job
Generally, employees will stay with an organization if the working conditions, compensation, and developmental opportunities, etc., are equal to or greater than the time and effort required of the employee.
Studies have shown that there are four primary paths to turn over that employees typically follow.
- Employee dissatisfaction: Approach this issue with traditional retention strategies such as monitoring workplace attitudes and addressing the drivers of turnover.
- Better alternatives: Employers can retain top talent by ensuring that the organization is competitive in terms of rewards, total compensation, benefits, growth opportunities and the quality of the overall work environment.
- A negative experience: Employees sometimes leave on impulse, without any plan for the future. Typically, this is the result of a negative response to a specific situation (e.g., experiencing difficulties with co-workers or their supervisor, being passed on for a promotion or not receiving timely reviews/pay increases, etc.). Companies can combat these types of issues by providing training to minimize prevalent negative interactions (e.g., harassment, bullying, or unfair and inconsistent treatment/practices) and provide support to deal with those problems (e.g., conflict resolution training for managers, alternative work schedules and/or employee assistance programs). Additionally, maintaining policies that reflect current employment trends and practicing consistency will go a long way towards employee job satisfaction.
Additional causes of turnover that merit attention include:
- Company commitment to employees and job satisfaction.
- Quality of the employee-supervisor relationship.
- Role clarity.
- Job Design/Scope.
- Workgroup cohesion.
Employee Retention Best Practices
- Effective practices in a number of areas can be especially powerful in enabling an organization to achieve its retention goals. These areas include:
- Recruitment. Recruitment practices can directly influence turnover, research has shown that presenting candidates with a realistic job overview during the recruitment process will have a positive effect on the retention of those new hires.
- Training and development. If employees are not provided with opportunities to continue to grow their skillset while performing work for a company, they are more inclined to leave for better development opportunities.
- Supervision. Studies have suggested that fair/equal treatment by a supervisor or manager is the most important determinant of retention. A company that focuses on supervisory and management development, training, and interpersonal communication skill-building, will typically enjoy having more tenured employees.
- Socialization/Diversity, Inclusion, and Belonging. Turnover is often high among new employees when they do not feel that they fit in or understand where they belong within an organization.
- Socialization practices such as structured “work buddy” or “mentoring” programs can help new hires become embedded in the company more quickly and thus more likely to stay
- Compensation and rewards. Pay levels, increase potential, and bonuses are only modest contributors to employee turnover. A company has three possible strategies to combat this cause
1. Lead the market in their industry with respect to total compensation and rewards.
2. Offer Tailored rewards to fit individual needs such as education assistance, student loan payoff, etc.
3. Clearly link rewards to retention (e.g., tie vacation hours to seniority, offer retention bonuses, increase profit sharing vesting to longer-term employees, or link defined benefit plan payouts to years of service). - Employee engagement. Employees who are engaged are generally more satisfied with their jobs, company, and enjoy their work. Engaged employees believe that their job is important, and that their employer values their contributions, and tend to take pride in their company.
Company-wide Retention Strategies
Company-wide strategies are directed at the entire organization and are intended to address overall retention rates. Some examples include:
- Changing the hiring process to incorporate criteria related to retention
- Providing company wide salaries that are market-based
- Continually working to improve overall work environment
