Employee turnover is expensive—that’s not a surprise. But how expensive it is might be shocking; a report published by Forbes estimates turnover costing U.S. companies $160 billion a year.
Here’s another turnover statistic to consider: In September 2018, 3.6 million Americans quit their jobs voluntarily. With the economy on solid footing, employees aren’t hesitating to jump to other opportunities, leading us to believe that retention can’t be considered a golden handcuff anymore, and that managers need to work more seriously toward increasing workplace morale and improving the employee experience.
Preventing turnover even amid this current economic boom is essential for companies that want to remain competitive and avoid contributing to the astounding $160 billion statistic. However, even successful organizations face challenges with employee retention. Often, this struggle involves their expectations, or even assumptions, clashing with the reality of what their employees want. Overcoming this standoff requires that organizations take an active approach to understanding their organizational culture and the employee experience, and provide creative and inspired reasons for their employees to stay.
Managers and executives often think that the more material benefits they offer to employees, the happier those employees will be and the less they will want to leave. However, that is simply not the case. Consider this side-by-side comparison:
Undoubtedly, some of the most common “expectations” will always be important to a majority of employees. Pay your employees well and they’ll be less likely to leave. Engage your employees with constructive feedback and they’ll understand how they can improve. At the end of the day, however, all the perks and benefits in the world won’t help if employees don’t feel valued or don’t see a path to develop their interests and passions, which can lead them to become disengaged. They may come to the office to earn a paycheck, but they go through the motions—and when something more fulfilling comes along, they leave. In reality, what employees are truly looking for goes beyond physical “things.” Rather, employees are looking for work that provides a sense of meaning, personal satisfaction, and an overall connection to the work they do.
In the book Love ’Em or Lose ’Em: Getting Good People to Stay, authors Beverly Kaye and Sharon Jordan-Evans write, “Many researchers who have studied retention agree on what engages or satisfies people and therefore influences them to stay: meaningful and challenging work, a chance to learn and grow, fair and competitive compensation, great coworkers, recognition, respect, and a good boss.” In short, the key to employee retention is to align expectations with the reality of what an organization is offering in the form of benefits—and this should remain a priority for all levels of management. It’s no longer enough to simply throw “material” things at employees and expect them to remain engaged; instead, managers must look toward aligning the immaterial with the material.
The needs of today’s employees are in flux, and this challenges managers to find new ways to motivate, inspire, and reward their employees. Otherwise, employees will keep jumping to “better jobs” that meet their expectations, and organizations and managers will keep wondering why they are losing talent. To get ahead of the curve, a few strategies for anticipating these needs and expectations include:
Actively develop employees … and include them in the process: Help Them Grow or Watch Them Go: Career Conversations Employees Want, written by Beverly Kaye and Julie Winkle Giulioni, explores how managers can facilitate active, collaborative career development for their employees. Engaging with employees to chart their future in a way that is unique to their experience, interests, and passions—instead of predetermining their path without any input from the subordinate—reinforces they are a valued part of the organization’s long-term success. The authors write, “Helping others grow can take a nearly unlimited number of forms. On one end of the continuum, you help employees prepare for and move to new or expanded roles in obvious and visible ways. But far more frequently, growth shows up on the other end of the continuum, in small, subtle ways that quietly create greater challenge, interest, and satisfaction in a job.”
Encourage passion: Employee engagement and retention are closely linked; workers who feel passionate about their jobs are less likely to leave. In Love ’Em or Lose ’Em, the authors write, “Passion for work means that people find what they do to be so exciting that it sometimes doesn’t even feel like work—so exciting that it brings exhilaration, a ‘high.’ Granted, even those who have this passion seldom have it every day, but they do know that feeling, and they know when they lose it.” Take the time to find out what drives your employees, and provide opportunities for them to build upon their passions as part of your organization rather than somewhere else.
- Show respect: Too many managers feel that if they don’t emphasize some sort of chain of command, they won’t get the most from their employees. However, as evidenced by the growing practice of servant leadership, hierarchical models are becoming increasingly outdated and rejected by a millennial workforce. Providing employees with a seat at the table and an opportunity to share their opinions without fear is a key way to show respect, driving the alignment between what managers want and what employees need. As detailed in Love ’Em or Lose ’Em, showing trust, understanding, and fairness inspires employees to reflect those qualities back, ultimately improving productivity and creating a more dedicated workforce.
Employee Retention for the Future
Employee turnover is a problem that isn’t going away anytime soon—if anything, it may become more pronounced as the next generation of workers brings new expectations to the workplace and their careers. Forward-thinking companies that create a culture of respect, inclusivity, opportunity, and purpose will be better equipped to handle whatever employee retention challenges come their way. Kaye and Winkle Giulioni write in Help Them Grow or Watch Them Go, “Even during challenging economic times, your best and brightest have options.” Be sure you do everything possible to ensure your organization is always the first option.