The days of casually picking a candidate to fill a role at your company and expecting them to stay long-term are over. If you are an employer or manager and you don’t have a strategy to retain your employees, you can’t expect them to stay.
Millennials no longer need to apologize for job hopping, so it’s on employers to not only attract the right talent, but also develop a plan on how to keep their employees engaged and loyal.
Gallup found that 21% of millennials say they’ve changed jobs within the past year. Further, only half of millennials strongly agree that they plan to be working for their company one year from now.
It’s well known that replacing an employee can be very expensive, with Employee Benefit News reporting that it costs 33% of an employee’s salary to replace them.
As if the financial hit wasn’t enough, the burden on the remaining workers can be heavier still. Replacing employees rarely happens quickly, so in the meantime, whoever is left working for the company can be overloaded with additional work and responsibilities that can tip them to levels of dissatisfaction.
In previous years, much of the blame of job hopping was targeted solely at millennials, suggesting that perhaps hiring the cheapest, youngest staff was not the best choice. As the workforce ages though, there are not many other options.
Millennials are the largest generation in the workforce, so if you have millennials leaving, they may be replaced with another millennial or Gen Z employee. Rather than trying to avoid a particular generation, you are better off to develop a plan that addresses retention problems directly.
Prevent Turnover Before You Make The Initial Hire
Some employers have developed plans and strategies on how to retain their existing talent, which is certainly a step in the right direction. How many employers are actively planning for retention with their new hires though? Too often, especially in recent years with a hot labor market, hiring managers are just trying to put qualified candidates in unoccupied seats.
Hiring the first qualified candidate is dangerous for a variety of reasons beyond retention. Culture fit, career growth opportunities, and team building are just a few other areas where hiring becomes key.
One company has set out to help solve the retention problem with their hiring practices.
“First, employers should focus on a similar hiring process that we use,” said Brian Weed, CEO of Avenica, a career matchmaking company. “Drop their typical fixation on specific majors, colleges, and experience; identify the transferable skills needed in the position and then ensure they are accurately assessing candidates’ capabilities in those skills.”
Avenica has a unique approach to solving the matchmaking problem so many companies face today. They invest fully in companies struggling to find the right talent, while simultaneously investing fully in new graduates and qualified young adults attempting to find the right career fit.
They do a full assessment on the candidates that goes well beyond their college major, GPA, and experience. It factors in their soft skills, industry specific skills, and the career goals of the candidate.
On the employer side, they work with hiring managers to help them let go of some of their tightly held expectations of candidates and trust that the more holistic approach they use to match candidates is better suited to find the right talent.
Further, Avenica has a program that I think would solve a lot of long-term mismatches up front. They offer a matching program that essentially offers a trial period for the candidate, on Avenica’s dime. That way the hiring employer has no risk of taking on a full-time permanent hire that could be a mismatch in the long run.
“Our Evaluation-to-Hire (ETH) program benefits both the grad and the client, reducing what the experts call ‘hiring friction’ that otherwise may deter either party from making the initial commitment,” said Weed. “For the first four months, the grad will be working for the client in their environment but will be on Avenica’s payroll. During that time, each party is figuring out if the other is a good fit for them. In 80%-85% of the cases, the answer is yes and the grad converts over to be a permanent employee with the client. For the small portion of times this conversion does not happen, Avenica can work with each party to find an even better fit.”
After the initial hire, there are new areas of attention employers should invest in to retain their talent. TINYpulse recently released an Employee Retention Report detailing the five main areas employers should be spending time on in order to retain their employees.
1. Focus On The Manager-Employee Relationship
According to TINYpulse’s report, 40% of employees that do not rate their supervisor’s performance highly have interviewed for a new job in the last three months , compared to 10% for those that do rate their supervisor highly.
“In order to ensure managers are held accountable for creating a positive experience for their employees, organizations should do more than the occasional 360 review for just a few senior leaders,” said Heather R. Younger, J.D, founder and CEO of Customer Fanatix, a talent retention organization. “I would suggest a quarterly feedback look that is bi-directional from employee to manager and manager to employee. Overarching performance evaluation should include team member feedback. Organizations should also look to align professional training and development opportunities and incentive plans with this feedback as well. This brings the focus back to the manager-employee relationship, which is most important for retention.”
2. Recognition Is Key
TINYpulse reported that 21.5% of employees that don’t feel recognized when they do great work have interviewed for a job in the last three months , as opposed to 12.4% that do feel recognized.
It may not be the main reason an employee quits, but feeling unappreciated certainly adds fuel to the fire of an employee considering a change.
3. Provide Work-Life Balance
An employer offering healthy work-life balance is no longer considered the exception, but is the expectation of candidates and employees, particularly among Gen Z and millennials. It’s no surprise then, that TINYpulse’s report stated employees who rate their work-life balance highly are 10% more likely to stay at their company.
I would argue that work-life balance is even more important than the 10% statistic lets on. The reality is, in most industries, if you as an employer don’t offer work-life balance, most younger workers today know that another company will.
4. Culture Trumps Compensation
In today’s labor market, employees know they have a choice. When they feel a mismatch between their work values and their employer’s culture, it can be tough to want to stay committed to their current workplace. TINYpule’s report stated that employees who rated their culture poorly are 24% more likely to leave.
Culture can be inclusive of things as little as what type of working environment is tolerated, what rules are established for employees, or even who is given recognition and promotion. It starts at the leadership level and funnels down from the leaders. In fact, middle managers may be the most responsible for setting the culture of a department or team, as often how an individual manager handles particular situations can be more visible and valuable to individual contributors than executive decisions.
5. Career Path Is Essential
More than any other reason I hear for Gen Z and millennial employees quitting, I hear them attribute it to the lack of a career path or limited growth opportunities in their job. According to LinkedIn’s 2018 Workforce Learning Report, 93% of employees would stay at a company longer if they invested in their careers.
The worst part about the troubling statistics on career-pathing is that employees aren’t necessarily looking for promotions every year, but they want to know where they are headed and what they are working towards. Further, they want new growth opportunities, which don’t always mean promotion. It could mean a challenge project for them to grow their skills that doesn’t result in a title or compensation change. This doesn’t have to be a complicated retention strategy. Keep it simple.
Whatever your retention strategies are, it’s clear that careful thought needs to be put into not only how current employees are treated, but how candidates and new hires are vetted during hire.
Whether you work with a company like Avenica or make your hiring practices more robust, establishing policies that help you bring on the talent that’s the best fit from the start can easy your retention woes. Beyond that, looking to expand in manager-employee relationships, work-life balance, recognition, culture, and career path can help your organization increase tenure.