Tips for
Employee retention
Do you know how many of your employees are looking for a new job? Our What Workers Want report from 2024 shows that 25% are planning a job change within the next 3 months. The year before, the figure was the same.
But employees aren't necessarily looking for a new job because they're unhappy in their current one. In fact, the same study shows that half of those who expect to change jobs within the next 2 years are happy in their current job.
So, what can you as a manager actually do to retain talented employees? In the following article, we provide some insights into why employees quit and what you can do to reduce employee turnover.
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According to the Danish Agency for Labor Market and Recruitment's recruitment survey from December 2023, 12% of companies' recruitment attempts failed and 12% of recruitments did not live up to expectations. At the same time, an average of 35% experience production limitations due to recruitment challenges.
In other words, the cost of recruitment is rarely just the hours spent by the hiring manager and talent acquisition team. You may need the help of a recruitment agency as well, or there are the indirect costs; the extra time and effort of the remaining colleagues in the team. For short periods of time this is usually fine, but it can quickly affect the well-being and motivation of the department.
In short: It's hard to find a replacement when an employee resigns. Compared to the increased workload of the remaining colleagues, the loss of knowledge and the cost of recruitment and training, it pays to work actively and strategically with employee retention
The first step to limiting employee turnover is knowing why it happens. Some forms of employee turnover are inevitable: retirement, relocation, career change or internal promotion, etc. Others get a job offer so good they can't refuse - and you're not in a position to match it.
However, the biggest reason employees change jobs is a disconnect between what employers offer and what employees want. Employees' needs and desires have changed significantly in recent years, and they also know that as long as there is a shortage of specialised and highly skilled workers, they can demand more from their workplaces.
What many organisations offer - and possibly yours too - only meets basic expectations, rather than offering something that sets them apart from the competition. While well-being is crucial, most people will still leave a job they are happy in for a pay rise or to develop their career.
So, the first step to understanding why your employees are leaving is to benchmark your salary package, benefits, development and training opportunities. Next, if you're not already doing so, you should start conducting structured exit interviews to map out a pattern of why your employees are leaving. Finally, of course, you should be proactive: Reconsider how you work with your employee satisfaction surveys. Are you asking the right questions? Are you actively working with the results? Do you allow for individual needs and wishes
Work-life balance
Career development
Challenging tasks
Work environment
Location
Employee benefits
Begin with salary
A competitive salary is still by far the most important element of any proactive retention strategy. It's a well-known fact that in order to get a significant salary increase, you have to change jobs. Want to keep your employees? Then be the exception, and not the rule. If you want salary interview advice from a manager's perspective, read more here.
Engaging performance reviews
Clear goals and deadlines often create confidence about expectations. So give your employees regular feedback, but also be receptive to their feedback. If your employees feel that their concerns and ideas are being heard, they're more likely to open up before they have one foot out the door.Reward good management and fight bad management
Great employees want great leaders; they want to be motivated, inspired and supported. Therefore, managers should not only be evaluated on whether their team achieves their goals - but also on their employees' well-being, staff turnover, how often their employees are promoted, etc.
Flexible and adjustable policies
Every team and department works differently, and so does every individual. For example, a team of mostly young employees may prefer more social activities, whereas a team with a lot of parents may prefer more remote work. While it's difficult to accommodate everyone's needs and wants, start a conversation with your employees about how you can find a solution that works for everyone.
Address career development
Lack of challenging work and career development are some of the biggest reasons why employees look for a new job. Therefore, it's important to create an engaging development plan for all employees - this doesn't necessarily always have to include a promotion, but also skills development, training, new tasks, etc. Remember those employees who may be outside the core business and therefore cannot be included in the more generic training plans and career paths
Work with culture on an ongoing basis
A company's culture is constantly changing because it is largely carried and influenced by its employees. That's why you should constantly evaluate it and intervene when necessary. However, there are some things management can also actively work on to create a better culture: how "failures" are handled and how victories are celebrated, space for work-life balance, support for mental and physical health, policies on meeting culture, etc.
Ultimately, no matter what you implement or do to retain your employees, you will lose talented and important employees. Therefore, it's important that you have good processes in place for what to do when this happens - so you can quickly replace the employee with a minimal loss of knowledge
Here are 4 tips for better processes that will help you adapt to resignations in the future:
Offboarding is just as important as onboarding. Especially employees who have been with your company for a long time have a wealth of knowledge that is important to your business
Remember the importance of documentation. While it may slow down the daily workflow a bit, it's critical that important knowledge and data isn't just in the hands of a few employees
Plan who will take over for your managers or key employees when they either move on to a new position internally or find a new job.
Evaluate your recruitment process. How long does it typically take from when you identify a need for a new hire to when a new employee starts? How much time does the hiring manager spend on the process? Which positions can you fill internally and which ones do you need external help with.
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