How to Retain Employees and Fight Employee Attrition
All employers are aware that the labor/employee market always experiences quantitative overcrowding and qualitative shortage, regardless of whether there is a recession or not. The problem with a recession is that it makes both retention and recruitment more difficult processes, as there is a glut of job applicants who need to be properly screened, and there is rising need to optimize business operations by retaining the right talent and getting rid of less-efficient employees. At the same time, every employer knows that it is the people who work for the company that make a company and losing key people can cause devastating losses to business operations.
Important facts that you need to take into account while formulating employee retention strategies:
Some facts, very important facts, that an HR department needs to keep in mind while formulating retention strategies are:
What you need to do to ensure retention:
- “Out-paying” the competition is not an absolute solution, but usually a solution of last resort
- The things that attract new recruits to a company differ from the attributes that support retention or wish of the recruit to continue in the company
- High potential employees are more worried about compelling career paths and robust development
- Flexible career paths, opportunities of skill development, regular intellectual challenges, creation of comfort zones, and greater involvement in decision-making contribute more to retention than salary alone can do. Salary packages attract talent, but are insufficient to retain them.
- Demand for quality employees exceed the supply, always, whether there is a recession or not
- Key employees usually leave because of stagnation, reaching career plateaus, or due to bad management – because managers were unable to provide or work out suitable career options and learning opportunities
- Key employees rarely leave solely because of competing offers of higher pay, but when they do they ensure that higher pay is also part of the equation
- Focusing solely on compensation-based retention strategies are totally inconsistent with reality
- Satisfying employee career expectations increases key employee retention by at least 20% according to research
- Competitive compensation is a big part of the equation, it may not be sufficient to retain a key employee, but poor compensation is sufficient to ensure that he/she leaves as soon as a suitable opportunity provides itself
To ensure retention of employees and keep down attrition, it is essential to keep the points mentioned earlier in mind and ensure:
In a recession, the demand for less-competent people goes down, but the demand for more-competent people goes up, because other companies, too, are seeking to optimize. Most are ready to poach your star performer, if by recruiting him/her, they can get rid of ten poor performers from their operations and manage to meet their objectives. So in a recession, holding on to key people and high performers and preventing attrition gains greater importance than ever.
- Creation of career development plans for specific employees who are high-performers and possess vital knowledge and expertise
- Creation of career planning as early as possible in the tenure of an employee so that the employee feels motivated to stay on
- Meet career expectations ‘promised’ to the employee as long as the employee continues to deliver what he/she promised
- Nothing is immutable – allow employees flexibility to change career paths within the company as much as possible without hurting operations
- Empower managers to mentor key employees properly
- Create a transparent and fair workplace environment