Employee retention is often at the forefront of company executives’ minds. Keeping the best talent onboard can mean the difference between underwhelming company performance and an outstanding one. Keeping top-notch talent onboard, however, does not boil down to money. Retaining the best talent often hinges on implementing key strategies to ensure employee engagement and commitment.
This discussion will explore the main reasons why employees leave their jobs with a focus on companies’ effective employee retention strategies to keep their best employees onboard.
Why Do Companies’ Employee Retention Strategies Fail?
At first glance, it is easy to assume that employees leave their jobs due to financial reasons. It would appear to make sense that most highly skilled professionals equate career success with a hefty paycheck. That assumption places significant importance on financial compensation instead of non-financial factors. The reality of the matter reveals that monetary issues take a backseat to non-monetary compensation issues.
Emotional and psychological factors play a critical role in why employees leave their jobs. A 2017 Forbes article highlights this assertion. The article discusses a survey of so-called “millennial” workers in which 66% claimed they would “likely leave their job if they didn’t feel appreciated.” This statement underscores the importance of non-financial factors motivating employees to stay at their current position.
Beyond a lack of appreciation, several factors determine an employee’s decision to leave their current position and search for another seemingly “better” one.
- A lack of appreciation
- Being burned out
- Lack of flexibility
- Reduced remote working opportunities
- Mental health issues
- Poor employee-management relations
- Company culture
- Little engagement within the company
- Unhappiness and dissatisfaction
- Limited career opportunities
The reasons listed above all point toward non-financial matters. Therefore, it is safe to conclude that salary is not the main driving force behind employee resignation. Other pivotal factors ultimately lead to employees leaving their positions.
A 2018 study on burnout and satisfaction in health care employees concluded that “Leadership qualities of immediate supervisors relate to burnout and satisfaction of nonphysician health care employees working in a large organization.” This study shows the importance of leadership in employees’ overall sense of satisfaction, particularly when considering critical factors such as burnout.
A 2020 report on employee mental health published by the Harvard Business Review offers the following data:
- Since the onset of the COVID19 pandemic, 75% of employees indicated they feel more socially isolated.
- 67% of employees report higher stress levels.
- 57% report more anxiety.
- 53% say they feel emotionally exhausted.
The report offers the following insight “Let’s approach it (the mental health crisis stemming from COVID 19) with compassion, honesty, and openness.” This insight clearly articulates the critical role soft skills play in effective employee-management relations.
A 2021 meta-analysis on literature pertaining to flexible workplace arrangements underscored the importance of adaptability in the workplace. In particular, this meta-analysis highlights the importance employees place on versatility. A flexible work environment constitutes an employee benefit while also leading to comprehensive organizational benefits.
Ultimately, employees leave their jobs due to a myriad of factors that go beyond monetary compensation. Therefore, companies must understand there are more important things than money when it comes to employee retention strategies. As Geekstack CEO Vinith Babu once said, “Good employees quit when management is bad. Bad employees quit when management is good.” This statement articulates managers’ vital importance in ensuring their best employees stay on their team.
Top Employee Retention Strategies
Jeff Weiner, Executive Chairman at LinkedIn, once remarked, “Start the retention process when the person is still open to staying and not after they’ve already told you they’re leaving.” This idea, though, underscores the importance of taking proactive action toward retaining top talent. In this regard, it is worth considering the following employee retention strategies as part of a company’s overall compensation package.
1. Employee retention begins with onboarding and orientation
Employee onboarding is a critical factor in setting up new hires for success. Effective new-hire orientation enables employee retention by assisting newcomers in adapting to the company culture and environment. Most importantly, effective onboarding provides employees with the tools they will need to succeed in their new position.
A paper in the Journal of Management Development addresses the importance of onboarding in employee retention practices. The paper specifically highlights employees’ expectations when joining a new company. Employees “expect that they will be treated with appropriate concern for their interested as part of their assumptions in coming into a news organization.”
Therefore, companies must consider employees’ expectations to help integrate newcomers into their organization, thereby setting them up for success.
2. Mentorship programs as part of employee retention
Some organizations fail to address employee issues until it is too late. For instance, employees with mental or emotional health issues may struggle with them until they ultimately decide to leave the organization. Company efforts to address issues at this point may prove insufficient to retain the employee.
Implementing a mentorship program for newcomers and incumbents alike can help address employee concerns well before they become a serious matter. A 2018 study of over 300 franchises in the United States found that mentorship programs are handy tools for developing human capital. Consequently, employee mentorship programs boost engagement and positive psychological health. These two factors are key elements in driving positive impacts on an organization’s bottom line. Indeed, mentorship programs help build confidence in employees, so they feel more comfortable and more appreciated by their company.
3. Wellness offerings can boost employee retention
Wellness offerings go beyond merely providing gym memberships or counseling sessions. Effective wellness offerings involve a broader sense of employee wellbeing. This approach illustrates the degree to which companies care about their employees’ emotional, mental, physical, financial wellness. As a result, employees feel valued and appreciated in their roles.
A 2021 study on the impact of employee wellness programs found that such programs impacted turnover intention, job stress, and perceived organizational support. While the offerings themselves may vary according to organization and industry, their positive impact reduces the likelihood of employee turnover while boosting a positive perception of organizational support.
4. Consistent feedback on performance helps boost employee retention
Consistent feedback is becoming increasingly utilized over formal annual reviews. While most organizations continue to conduct yearly appraisals, the trend has begun to turn in favor of ongoing one-on-one meetings to discuss performance. Specifically, feedback sessions focus on improving employee performance through needs analysis. This needs analysis allows managers to design tailored training programs conducive to personal and professional development.
A recent study underscores the need for appraisals to involve feedback on relevant and useful situations that employees constantly face. These often impromptu sessions allow managers and employees to address the real challenges employees encounter directly. Therefore, it is a question of addressing the true barriers affecting employees instead of generalized parameters that offer little insight into an employee’s real challenges.
This approach can greatly enhance employee retention by taking appropriate steps to aid employees in becoming truly successful in their position.
5. Employee retention directly correlates with career development
Career path development enables companies to bolster their compensation packages, attracting more top-end talent. When employees see a clear career path ahead of them, they feel motivated to pursue such opportunities. In contrast, employees that cannot envision a career path tend to become demotivated; a significant factor in leaving their jobs.
Employee turnover intentions correlate directly with career development opportunities. This assumption stems from Career Construction Theory (CCT). This theory asserts that overall employee happiness reduces the likelihood of an employee leaving their job. Employee happiness largely depends on compensatory factors. Salary is one element of compensation, such as flexibility, appreciation, and career development. Consequently, organizations that allow their employees to build their careers can significantly reduce their staff turnover rate.
What About Salary?
There is no question that salary plays a key role in employee retention. However, contrary to popular belief, it is not the most important factor. As a determining factor in employee retention, financial compensation is not generally the most important factor. Non-monetary compensation overshadows monetary compensation. A competitive salary continues to attract high-end talent while numerous other factors keep them at the company. Intangible benefits help organizations hold on to their top performers.
How Can Simply Biotech Help Employee Retention?
Simply Biotech is a trusted partner in human capital management. The experts at Simply Biotech understand what it takes to attract top biotech and medical device talent and retain it. Years of experience have enabled Simply Biotech to develop key strategies that effectively boost employee retention schemes.
Find out more about how Simply Biotech can help your organization hold on to its best team members today.
This post is made available for informational purposes only to provide a general understanding of the topics discussed herein. It is not intended to provide specific business, legal, or professional advice, and should not be relied on as such. Simply Biotech is not liable or responsible for any damage or loss arising from any reliance placed on such materials.