Does power lie in the hands of employees? In today’s job market it does, and leaders must address the causes of attrition to retain their workforce. Employee loyalty is hard to earn but ultimately the key to business success.
The reasons a great employee leaves (or the methods of how to keep one) can be a bit of a mystery if you haven’t had time to think deeply about your company culture, or if you’re just starting to build out the business. Here are a few surprising facts about employee retention and how to avoid losing valuable team members.
1. The average employee exit costs 33% of their annual salary
Replacing employees is a large investment. A company must spend significant time and money to search for the best talent through advertising, recruitment agencies, screening, interviewing, and hiring.
A study by Employee Benefits News states that the average cost of losing an employee is a staggering 33% of their annual salary. You haven’t just lost talent or time – you’ve lost valuable funding for your company. When recruitment fees, training, and lost productivity are considered, a high turnover rate can have crippling financial implications for a business. Why not retain your employees, funds, and time by ensuring their happiness?
Implement a strategy to combat employee attrition and improve employee retention. People are every company’s greatest revenue generators in terms of innovation, sales, customer relations, and many other important factors. The cost of attrition is directly related to the company’s ability to redistribute the work and hire replacements for lost employees, usually at greater costs. All companies spend money to attract the right people. What many companies don’t do is invest in employee retention strategies.
2. Bad boss performance makes employees 4x more likely to quit
According to the TINYpulse Employee Retention Report, 40% of employees that don’t rate their supervisor’s performance highly have interviewed for a new job in the last three months, compared to just 10% for those that do rate their supervisor highly. Managers that aren’t kept to a high standard can negatively affect their subordinates and result in high turnover.
According to Udemy, nearly half of employees said they’ve quit a job because of a bad manager. 56% think managers are promoted prematurely, and 60% think managers need managerial training. Too often, managers find themselves elevated into these positions due to the need for employers to fill a vacant spot when the person they have in mind is not ready. In some cases, these managers haven’t been trained thoroughly enough to manage their team effectively. This can cause unrest within a team, and cause employees to look for better-managed companies to join.
3. Employees that don't feel recognized when they do great work are almost 2x as likely to be job hunting.
According to TINYpulse data, 21.5% of employees that don’t feel recognized when they do great work have interviewed for a job in the last three months, compared to just 12.4% that do feel recognized. Employees seek validation for their work and are more likely to show loyalty when validated. Per Qualtrics, employees whose managers consistently acknowledge them for good work are five times more likely to stay at the company. Those whose managers consistently help them manage their workload are eight times more likely to stay, though only approximately half of managers effectively accomplish either.
Not concerned about your employee retention yet? TINYpulse discovered that 24% of employees who felt they had not received recognition from their direct supervisor in the past two weeks had recently interviewed for another position, compared to just 13% who had received recognition.
Make employees feel appreciated. Employees in a new position often try hard to prove their worth to management. However, if their efforts are met with negative criticisms or they go unrecognized altogether, these employees tend to become unhappy and not motivated. Download the free Employee Recognition and Appreciation Report to take the first steps in building a culture of appreciation.
4. Employees won’t stay if there isn't a culture of encouraging upward feedback
Employees that don’t feel comfortable giving upward feedback are 16% less likely to stay at their companies, according to TINYpulse. Feedback shouldn’t just flow one way. Open communication is key to understanding the needs and points of improvement for both managers and employees.
Qualtrics reports that 60% of U.S. employees reported having a way to provide feedback about their own employee experience, but only 30% said their feedback is acted upon by their employer. It’s great when employees have upward evaluation systems in place, but when they believe their leadership can’t or won’t do anything to improve a problem, they may consider their employers to be ineffective.
Encourage employees to regularly communicate their thoughts. An open line of communication will demonstrate to employees that their opinions are important. Regular and honest communication shows employees that they’re valued, and it also allows you, as a leader, to recognize when adjustments might need to be made to improve employee retention.
5. Clear onboarding processes make employees happy
According to TINYpulse data, employees are 23% more likely to stay if their manager clearly explains their roles and responsibilities. Don’t leave your employees wondering what they need to do on a day-to-day basis and questioning whether they’re meeting your expectations. One study by Jac Fitz-enz contained in his book titled “The ROI of Human Capital” established there’s a distinct link between staff onboarding and employee retention.
A joint study from Kronos and the Human Capital Institute states that 76% of human resource leaders said their onboarding processes are underutilized, and another 24% didn’t even have an onboarding strategy. Disorganization from the beginning point of an employee’s experience can only impact their work negatively – ineffective communication, how they perceive company culture, and time lost to name a few.
6. Feeling undervalued jump starts the job search
Employees who don’t feel valued at work are 34% more likely to leave their companies within the next year. As one would expect, most employees want to feel like their contributions matter. 12% of workers say they would quit their job because they don’t feel appreciated, according to Robert Half.
Furthermore, studies show that 79% of people who quit their jobs cite “lack of appreciation” as their reason for leaving. When employees spend considerable time and talent on the business, and management doesn’t validate their work or reward their contributions, it’s no wonder they seek employment elsewhere.
7. Career advancement retains talent
TINYpulse findings reveal that employees who feel they’re progressing in their career are 20% more likely to still be working at their companies in one year’s time. A lack of advancement or skill building can be morally deflating. Not to mention, more than 70% of high-retention-risk employees say they'll be forced to leave their organization to advance their career.
8. Bad culture breeds high turnover and low employee retention
Organizations that provide ill-fitting cultures for their workers can expect to see higher turnover. Employees who rate their culture poorly are 24% more likely to leave their organizations within a year’s time. The day-to-day experience of your employees is a huge factor in determining career choices. According to a Hays report, in a survey of 2,000 employees, almost half (43%) said they’re looking for a new job, and corporate culture was the main reason.
9. A sense of purpose has a sizable impact on employee retention
Employees who believe their company has a higher purpose than just profits are 27% more likely to stay at their companies. Working with a team towards a specific mission and vision is an experience that employees find important. Gallup research found employees who are "engaged and thriving" are 59% less likely to look for a job with a different organization in the next 12 months.
10. Lack of respect loses employees
According to TINYpulse research, employees who say there’s a low level of respect between colleagues are 26% more likely to quit their jobs. And 61% of employees say trust between themselves and senior management is very important to job satisfaction. Only 33% are very satisfied with the level of trust in their organizations, according to SHRM. A toxic culture pushes away top talent, despite other perks and benefits an employer might offer.
11. Work-life balance is more valuable than you think
Employees who rate their work-life balance highly are 10% more likely to stay at their company. In addition, a study in the Employee Engagement Series conducted by Kronos found 95% of HR leaders admit employee burnout is sabotaging workforce retention.
Access to remote work and healthy work hours are just some of the factors employees look for when deciding whether to stay at a company or move on. Encourage employees to set goals for their work lives, their personal lives, and their pursuit of a healthy work-life balance.
12. Professional growth is top priority
LinkedIn’s 2018 Workforce Learning Report states that 93% of employees would stay at a company longer if it invested in their careers. While no one wants to see their star player leave, developing your team to be the best that they can be creates a positive culture. The vast majority of millennials (87%) say professional growth and development opportunities are top priorities, according to Gallup.
13. Empowered employees are happy employees
TINYpulse found that employees who feel in control of their career are 20% more likely to stay in their roles. When employees have an idea of where their career trajectory is headed, and leadership supports their endeavors and provides guidance to make that a reality, loyalty will follow.
The Conference Board’s latest survey on job satisfaction shows that 51% of U.S. employees feel satisfied with their job. However, this means 49% aren’t satisfied, and it’s up to leaders in the workforce to find out why. Talk to employees and put transformational processes in place if you wish to retain top employees.
Create a better employee experience
Whether you’re a C-level executive, HR department professional, or middle manager, be committed to creating a better employee experience. Check out the TINYpulse Employee Retention Report, where you’ll find actionable advice from leadership experts that any organization can follow to combat turnover problems or augment current growth.
TINYpulse also includes a five-step approach to creating an effective employee retention strategy and reveals how you can identify the top attrition drivers in your own workforce and launch an effective plan of action.
- The Actual Cost of Employee Attrition
- Top 10 Reasons for High Turnover Rates
- Why You Need a Retention Policy