One of the biggest challenges HR professionals have faced in recent years is employee retention and turnover.
The cost of replacing an employee is approximately one-fifth of their annual salary and this only increases with each progressive level of seniority (1).
Retention not only has a positive financial impact on the business but also supports the growth of a strong leadership pipeline to secure the future of the company. It is also a welcoming signal that your employees are happy.
To develop a robust retention strategy, companies need to understand the key factors behind workers’ decisions to leave or stay.
why are employees seeking to leave?
Employees seek to leave a company for a host of reasons, however the latest Randstad Employer Brand Research (REBR), which looked at ~10,000 Australian workers’ job seeker drivers, indicates that a lack of visibility over their future and poor work-life balance are some of the greatest drivers of change.
Top reasons why Australian employees seek to leave their jobs:
- Limited career path
- Insufficient challenges
- Work-life balance issues
- Compensation too low
- Insufficient flexible work options
how to retain good people
It is widely accepted that employers need to deliver clear and defined employee value propositions for staff so they are motivated to stay with the company. However, what’s important to one individual may not be valued by another.
According to Randstad’s findings, Australians rank work-life balance, job security and location as the primary motivators to stay in their role. This was closely followed by salary and benefits, plus flexible working arrangements.
top reasons why Australian employees stay in their jobs:
- Work-life balance
- Job security
- Salary and benefits
- Flexible working arrangements
There is an upward trend in employees wanting to lead a balanced lifestyle. According to the REBR study, work-life balance is the single most important reason for more than half of employees to choose their employer. This is a consistent finding since 2016, but for the first time ever it tops the list of wishes from both employees and job seekers.
Long-term job security also continues to be valued by Australians. When an employee doesn’t have a clear career trajectory, it can negatively impact their engagement and overall performance. Strive to create career paths for staff, not just job roles to fill quotas.
Employees will remain in a role if it is conveniently located, lending itself to greater work-life balance by ensuring more time for activities outside of work.
While an employee’s residential address may be out of your control, companies can look to support those living further away by offering work from home days or flexible hours to accommodate for peak travel times.
In a talent-short market like Australia, where the employment rate is at an all-time high, employers need to think about how they can positively impact people’s working life if they want to retain stand-out staff.
I encourage leaders and HR professionals to look at an employee’s career and personal aspirations holistically to develop an effective retention strategy, tailored to each individual.
This approach will help future-proof the organisation, generate goodwill amongst staff and have a positive flow-on effect on your organisations product and services.
1. CBS: How much does it cost companies to lose employees
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For more information on how you can retain and attract the best talent for your business, please request Randstad Employer Brand Research report.