As millennials begin to comprise a major part of the workforce, employee retention has become top of mind for many businesses. In a Gallup poll, 60% of millennials were open to a new job, while 21% had changed jobs within the prior year. This increasingly common move has earned millennials the title of the “job-hopping generation.”
Companies are undoubtedly feeling the effects of high turnover: Approximately 50% of companies admit to having difficulty retaining employees, and 70% have trouble replacing those who leave. In a tight job market, retaining valuable employees (paywall) pays off in spades. Organizations with high retention rates not only save money on recruiting costs, but they also report better performance, productivity and quality of work. There’s a clear business case for retaining talented employees. But how do you do it?
The answer lies in company culture far more than in salary. Money alone may be enough to attract a candidate, but it won’t keep an unsatisfied employee around long. This may come as a surprise to employers who often believe that their employees leave primarily for salary-related reasons. In reality, the vast majority leave their jobs for non-financial reasons.
Reasons for leaving a job can include a mismatch in talent and interests, insufficient feedback and support, or a lack of available growth opportunities. Fortunately, businesses can address these issues and keep the right talent around for years to come.
Retention Begins Long Before You Extend An Offer
First and foremost, companies must realize that retention starts with recruitment. Recruiting candidates who are good cultural fits is vital to reducing turnover. Identify aspects of your company and culture that you want to emphasize, then seek out employees who are a strong match based on those qualities. Remember, it’s OK to pass on a candidate who is not a cultural fit. If they are not a fit during the recruitment process, they most likely will not be a fit once employed and will become a retention risk when a new opportunity comes along.
When speaking to candidates, take note of qualities beyond work experience. Long tenures at previous jobs can be indicative of loyalty and engagement, both of which are great signs in terms of retention. It’s also a good sign if an employee takes part in activities such as sports or volunteering outside of work, especially if they’ve shown commitment to these activities for a long time.
You should also consider adding a robust employee referral program to your recruitment efforts. Your current employees are likely to have a strong sense of who would be a good fit. They can describe the role honestly and accurately to the candidates they refer, and referral bonuses can also be a great perk for your existing employees.
Invest In Your Employees
The same amount of care and consideration that you put into hiring a new employee should extend to their career at your company. Opportunities for continuing education and ongoing advancement are among the most effective ways to make employees feel valued. In fact, research shows that 80% of employees consider high-skills training a top benefit, while 74% list professional development programs.
Identifying and supporting potential leaders is another key investment for your company. Companies are often advised to hire for growth, but investing in good leadership will allow that growth to be sustainable. Not only will strong leaders provide a value-add in eventual mentorship for the employees they manage, but as the average cost of employee turnover is $15,000, they will also provide huge savings as they grow into executive roles.
Finally, you shouldn’t just be invested in employees’ workplace skills; it’s also important to be invested in them as individuals. Managers may individually be responsible for a great degree of employee engagement, which is a key factor in whether an employee will stay with the company.
Building A Safe And Inclusive Work Environment
Beyond bringing along their reputation for job-hopping, millennials are also partially responsible for driving the importance of diversity and inclusivity in the workplace. The younger generation places a premium on workplace diversity, with 53% of millennials stating that they would leave their current role for one with more workplace inclusion.
But it isn’t just millennials who feel this way. Eighty percent of job seekers identify inclusion as an important factor in choosing a new employer. To recruit and retain top talent, companies should make a conscious effort to build an inclusive work environment for employees of all races, genders, ages and backgrounds. To this end, companies can establish a clear code of conduct, formal anti-discrimination policies and accompanying training programs, and an equal pay commitment.
Providing employees with opportunities to share their thoughts and concerns can help your organization stay on track with its inclusivity goals, as well as make your employees feel heard. Taking employee feedback into account — and actually making changes based on it — goes a long way toward helping employees feel valued.
That said, you’ll still probably face more turnover than in decades past. High turnover may just be the new normal. Careful succession planning and greater investment in your recruiting efforts are requisite to keep up in today’s changing workforce. When approached with the right mindset, the job-hopping habits of today’s workforce can represent an exciting opportunity for companies to become more agile and embrace fresh talent.
