Four Focus Areas for Retaining Employees
The tight labor market, and increasing competition for top talent, is causing leaders to analyze their strategies to retain employees. To be effective, you first need to understand what’s affecting retention – and turnover. This requires a systematic approach to documenting why people leave (turnover) and understanding the dynamics behind retention. For turnover, you want to understand the rate of people choosing to leave (voluntary turnover) and of those being asked to leave (involuntary turnover).
For involuntary turnover, code reasons for termination and provide detailed notes. Make sure everyone is using the same codes when providing reasons for termination so you can quickly run the numbers to see the most common reasons for termination. Over time, this information will allow you to identify trends, whether it is performance issues, lack of attendance, poor customer ratings, or mismatch with your company’s values and beliefs (i.e., not a culture-fit).
For voluntary turnover, gather information from employees formally or informally. The formal way would be through exit surveys given on their last day or shortly after their departure. A more informal approach is for managers to ask departing employees their reasons for leaving and provide consistent and clear documentation (using a coding process like we described above).
Questions You Should Be Asking
When evaluating reasons for turnover, here are questions you should be asking your employees – and yourself:
1. Are employees leaving for another job opportunity? If so, could you have offered them a similar opportunity?
2. Are they leaving for more pay or improved benefits? If yes, could your company have increased their compensation either through a direct pay or benefit increase (e.g., more vacation time), or through intangible benefits (flexible schedules, opportunities for development)?
3. Are they leaving because of poor management? (This will likely be identified through an anonymous exit survey or proactively through an employee experience survey – see below)
4. Are they leaving for reasons related to the quality of your company’s customer experience or product/service? Or the quality (or lack thereof) of their coworkers? (Employees may or may not feel comfortable sharing this information, so tools such as exit surveys or employee experience surveys can help you gather this information)
The Role of Trust, Satisfaction, and Engagement
Although understanding reasons for turnover is useful, it is a reactive approach to improving retention. In looking at the model below, you can see how perceptions of trust, satisfaction, and engagement directly influence employee intentions to stay.
Understanding current employee trust, satisfaction, and engagement, and which elements of the work environment are linked to these attitudes is a proactive approach to retention and can be done through employee experience surveys (often called engagement or satisfaction surveys). With survey results, you know what should be improved – and aren’t basing decisions solely on turnover data and the beliefs of management. For example, let’s say you find high levels of dissatisfaction with pay and benefits. With survey data you will know if this level of dissatisfaction is related to higher intentions to leave – as well as lower engagement. Dissatisfaction with pay and benefits is sometimes driven by a poor work environment – people believe they are not paid sufficiently given subpar coworkers, leadership, and policies. With a survey you can determine whether pay is the reason itself – or if another cause is driving it.
Once you have this information, you can pinpoint areas of opportunity to increase employee trust, satisfaction, engagement, and retention.
When we look at employee retention – and more specifically, at building trust and increasing satisfaction and engagement – there are four main areas employers can focus on. To learn more and to continue reading, download the whitepaper below.