This month, Cognizant created a budget of $30 million for employee retention. This move was put in place to address the 19% attrition rate in the company.
Such a high employee turnover rate can be an alarming situation, particularly when it involves the best employees. Not only does it harm productivity but it can also have an impact on other employees. Therefore, you should have an employee retention strategy in place to tackle it.
Why do employees quit? What employee retention strategies can you use?
Before you can come up with a strategies for retention, you need to understand what’s prompting the employees to leave in the first place. Doing so will help you in focusing your efforts on the most important areas. While the employee concerns differ according to each company, here are the most common reasons why employees leave:
1. Insufficient compensation
Poor salary and benefits are more often than not the reason why most employees quit. This is more likely to be a problem for small organisations that may not be able to compete with the packages being offered by larger organisations.
What you can do about it: If you can’t offer the most competitive salary on the block, you can offer other perks, such as stock ownership, flexible work schedule, paid time off, parental leave, etc.
A key thing to remember is that the benefits you offer should resolve those pain points of the employees which cannot be solved only with compensation. For example, a flexible work schedule can be useful for parents. You could also invest in your company culture so that employees want to stay for reasons other than compensation.
Other than salary and bonuses, you could also provide training and development opportunities, which can help them in upskilling themselves. For example, industry-specific events or online training. This shows that you value the employee and are genuinely interested in their growth.
2. Lack of appreciation
Employees want to feel appreciated for the work they put in, especially if they go out of their way to contribute to projects. Therefore, a lack of appreciation for their work or not giving credit where credit’s due can lower motivation and productivity, which can cause them to quit.
What you can do about it: You should have an employee recognition system in place to appreciate your employees. This could be in the form of incentives, appreciation over emails, praise during all-hands meetings, handwritten notes, time-off, etc. Make it as specific to the employee and their contribution as possible. You should also make sure that appreciation is not limited to work that drives sales or brings profit.
3. No advancement opportunities
Lack of career advancement opportunities is one of the topmost why employees leave. This could result from many reasons such as a limited number of opportunities in small businesses, skill gaps, or inefficient communication between management and employees.
What you can do about it: In addition to having regular performance reviews, you should have an annual meeting wherein you talk about the career goals of the employee. If they would like to advance in a particular role, you can discuss the skills and experiences that they will need to make it happen.
Perhaps you already offer advancement opportunities but they are limited to managerial positions. In this case, you should come up with alternate career paths.
If you are a small business that cannot afford frequent promotions, you can offer raises, and more learning opportunities and challenging projects so that they can upskill themselves. While this is not a long-term solution, it could still help the employees from feeling stagnant.
4. Management/leadership issues
“People leave managers, not companies”. Although this claim has been contested by CultureAmp, it may still be the reason why some employees leave particularly if there’s a high turnover in a particular team. However, in some cases, the managers may not be the issue but the leadership in the organisation.
What you can do about it: Invest time and resources in training managers. While an employee may be a star performer, they may not be naturally inclined towards managing. So don’t just assign them the role and let them figure it out. You should teach them skills like conflict management, empathy, communication, stress management, etc. Additionally, you can have an open-door policy that encourages the reportees to share their feedback about the management and leadership.
5. Health issues
Last year saw employees opening up about their work-related health concerns. Common factors included job insecurity, long hours, micromanagement, and high workload. Apart from work induced health issues, some employees may suffer from other health problems, which can prompt a job search.
What you can do about it: It is necessary that managers have regular check-ins with employees where they genuinely try to learn about their report’s well-being. Some practical ways to address health challenges include providing health insurance or other health care benefits, allowing more flexibility in working hours, providing counselling support, prioritising which projects are important, and offering paid time off.
While employees start on a high note of enthusiasm, this can sometimes wear off due to a variety of reasons. Perhaps the role doesn’t meet their expectations, absence of challenging work, lack of appreciation, etc. The current situation of remote work could also be causing isolation, which can lead to disengagement.
Disengagement can significantly reduce productivity, which is why it is important to address it as soon as possible. For example, Amazon recognises the long-term effects of having a disengaged employee and pays its employees $1000 to quit if they are unhappy in the first year and the amount keeps increasing with every passing year.
What you can do about it: Look out for signs of disengagement such as reduced performance, withdrawal from team discussions, and an increase in the number of off days. Once you recognise that an employee is disengaged, hold a discussion with them about what’s causing the disengagement and discuss ways to resolve it. Once you start working on re-engaging the employee, keep a check on their progress and appreciate them for making progress.
7. No work-life balance
Given the havoc a bad work-life balance can wreak on a person’s health, it should come as no surprise that it could cause an employee to quit.
What you can do about it: You can allow a more flexible work schedule, encourage taking time off, and prioritise what’s most important in the assigned work.
A good work-life balance is beneficial not only for the employees but also the company as it can increase productivity. For example, in 2019, Microsoft Japan conducted an experiment wherein it implemented a 4 day work week. Surprisingly, this increased the productivity by 40%. This was a radical move in the country which is infamous for its long working hours and stigma around vacation time.
Other countries championing the work-life balance include Luxembourg, Denmark, Sweden, Netherlands, Norway, and France where the working hours per week cannot exceed 35 hours. Despite the lesser number of hours and greater focus on rejuvenation, these countries are amongst the top 15 productive countries in the world. In addition to countries, many companies that value work-life balance, such as Capital One Financial Corporation and Adobe, have made it to the Fortune’s 100 Best Companies to Work For.
8. Lack of purpose
Employees need to feel like their work makes a difference to the business or society. Although this impact is clearly seen in some roles such as customer support and marketing, other employees may have a hard time understanding the difference they make, which can cause disillusionment and a lack of accomplishment.
What you can do about it: Take the time to help the employees uncover how their work matters. Other than this, your company could engage in a cause, such as education inequality, waste management, etc., and provide them volunteering opportunities for the same. This could give them a sense of pride in their workplace.
9. No mentorship
Having a mentor is of great importance to all employees but especially so for freshers, who want to seek advice from someone who has advanced in the same career path. Employees may start to feel directionless in their roles, which can compel them to look for organisations that offer mentorship in their career field.
What you can do about it: If you are hiring for an entry-level role, you should ensure that the hires get mentorship.
For instance, at Internshala, every new employee works closely with a mentor, especially at the beginning of their journey. The onboarding plan consists of daily catch-ups with the mentor until they feel comfortable in the role. Once the employee feels settled, they continue to have weekly and monthly catch-ups with their mentor who provides them with necessary feedback and guidance. This makes the employee feel that their challenges are heard and they are progressing in their career path.
The employees who have gained the necessary skills and milestones in their role then step into the people leader role and mentor new employees in similar roles.
Ideally, a mentor should be different from the supervisor. However, if the two roles overlap, then you should make sure that the mentee has a safe space to seek guidance on difficult topics.
In addition to the mentorship program, you can employ a buddy system. As part of this system, an employee can have a workplace buddy who helps them adjust to the company culture. A buddy could help the new hire with any questions that employees may not be comfortable posing to their managers. This can help an employee in getting used to the work culture and practices faster.
Sometimes, despite your best efforts, employees will choose to move on. This could be prevalent if you are in an industry brimming with opportunities, such as the tech industry. In this case, you should be prepared with an action plan that can be immediately put in place after an employee leaves. For example, different people can work with the same client so that someone can continue the relationship once an employee decides to leave.
Besides having a plan, you should enquire why the employees are leaving so that you can work on improvement areas for retaining employees.
At the end of the day, you need to remember that your employees aren’t merely resources. You need to acknowledge their need for belonging, making a contribution, and feeling valuable. Give them the tools and environment they need to thrive at your workplace. So when they do decide to move on, it feels like the end of an era!
Now that you know how you can improve your employee retention rate, register and post a job on Fresher Jobs on Internshala to give freshers a fulfilling career at your company.
Image credits: <a href=’https://www.freepik.com/photos/business’>Business photo created by marymarkevich – www.freepik.com</a>