“How we spent our time before the pandemic may not be how we want to spend our time after.”
That quote from Anthony Klotz, management professor at Texas A&M’s Mays Business School, goes for both employees and employers. Klotz coined the phrase the “Great Resignation” in reference to the millions of Americans who quit their jobs during the pandemic. And employees are still leaving at record levels.
In 2017, the annual overall turnover rate in the U.S. was at 26.3%. In 2020, that number jumped to 57.3%. The cost of replacing an individual employee can range from one-half to two times the employee’s annual salary, and that’s a conservative estimate. For example, if a 100-person organization provides an average salary of $50,000, it could have turnover and replacement costs of approximately $660,000 to $2.6 million per year. When you do the math, it’s not pretty.
Therefore, employee retention is so high on the priority list for most HR leaders going into the latter half of 2022. And our opinion to companies currently struggling with this goes back to the quote from Klotz. How you spent your time before the pandemic may not be how you want to spend your time (and corporate investment dollars) now. It’s time to think differently.
But what exactly can organizations and HR departments in particular do to combat the “Great Resignation” and retain their workforce? We have come up with seven best practices that will help improve morale and reduce employee turnover, and in turn, protect the bottom line.
Hiring the right people is ground zero for decreasing turnover rates. It’s important to recruit candidates that are a good fit not only for the job description itself, but also to fit the company and team culture. You’re not just hiring warm bodies to meet a quota. You’re bringing a new family member into the fold.
Diversity should play an important role in the recruiting, hiring, and promotion process in your organization. It is a proven fact that companies with more diversity end up being more successful. Plus, more people — especially Millennials and Gen-X’ers — want to work in a diverse environment. It’s up to the leadership of every organization to create a dynamic and inclusive culture so that a multigenerational workforce feels welcomed and valued.
Many people leave their jobs because they don’t feel their voices are being heard. A recent Healthy Organization Research report found that only 13% of companies survey their workforce to understand their needs, and only 18% attempt to actively manage and optimize workloads to remove stress. It is important to survey your workforce and provide clear communication paths where employees can give and receive feedback without fear of being punished or ostracized. And, when employees do provide honest feedback, listen to them, and act.
Another main reason people are leaving their jobs in droves is because they don’t feel recognized for their hard work, especially during the pandemic. Recognition breeds loyalty, so you should consider having a robust employee appreciation program in place that makes it easy to reward your staff for outstanding performance. When employees feel appreciated, they feel better about themselves, their job, and the company they work for. And productivity soars.
When you consider the fact that the employees who are most likely to quit are the highest performers, the stakes become even higher.
The best way to encourage growth and career pathing within your ranks is through training and mentorship. That starts the moment a new employee is hired. HR should coordinate with the employee and their manager to develop a growth plan and refresh it on a regular basis, perhaps through the annual review process. This plan should include any type of education or training needed for the job, along with an employee motivation and mentorship program that encourages growth throughout the entire employment lifecycle.
The fastest and easiest way to lose loyal workers is to hire outside the company as opposed to promoting from within. Doing this signals to current employees that you don’t value the contributions they’ve made to your company in the past and causes them to look elsewhere for advancement. When you promote from within, you already have a candidate that understands the company culture and that is already part of that culture. Promoting from within is cost-effective and it leads to happier, more productive, and more loyal employees. It’s a win-win.
The best way to reduce employee turnover in your organization is to get to the root cause. Talk to your employees and really listen to their issues. Find out why they’re unhappy. A lot of people left their jobs during the past two years due to burnout. Your job is to prevent your staff from getting to that point. Understand the employee experience by practicing empathy and understanding. Be willing to adjust. If employees want more flexibility in their current situation, try to accommodate them. If you take the hard line of “this is how it’s always been done,” you’ll lose your workforce to other companies that will be happy to accommodate them.
The “Great Resignation” shows no sign of slowing down anytime soon, which means your organization is at a high risk of losing employees. The time to act is now. Hire the right people, embrace diversity and flexibility, recognize, and reward your employees, and promote from within. Otherwise, your bottom line will bottom out.
However, even though the seven best practices will help reduce turnover, you and I both know that change is hard. The easier you make it on yourself to incorporate the best practices, the more likely it will become the fabric of your organization. Intellective’s Employee Experience Pack is a ServiceNow bolt-on package that makes it easy for organization to incorporate the best practices in a matter of weeks. The Employee Experience Pack allows you to easily onboard new employees, encourage honest feedback, recognize and reward employees, encourage growth and career advancement, and get to the root cause of factors driving employee turnover.
The Employee Experience Pack is a ServiceNow bolt-on tool that provides all the information a team member needs in one location so that they do not have to look all over the place to get what they need to do their job. The Employee Experience Pack also allows employees to give and receive feedback while being recognized for a job well done.