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Why do good employees quit? Turnover can be costly and with the supply and demand ratio tipping in favour of skilled professionals, retention makes sense as a strategy to fortify against skills shortages.
Yet it seems that more managers will soon be questioning why their top talent is leaving, with the latest research showing that 38% of Australians are looking or planning to look for a new job in the next 12 months.
According to the 3,800 skilled professionals we spoke to for our annual Hays Salary Guide, another 39% are open to opportunities.
Clearly, retention needs more focus. This becomes a more pressing concern when we consider that only 46% of the professionals we spoke to are satisfied with their current job.
Add rising overtime, which is reaching unsustainable levels in some workplaces, and the retention risk rises even further.
At the same time, employers have told us they intend to increase their permanent headcount, yet they believe skills shortages will impact the effective operation of their organisation or department.
With organisations returning to growth – and many now expanding – in the wake of the COVID-19 pandemic, it’s no wonder that there’s a renewed focus on attraction – but this must not be to the detriment of retention.
With a significant percentage of skilled professionals already looking, or planning to look, for a new job in the next 12 months, retention needs to be prioritised. So, how can you improve employee retention?
When we examine the reasons why people plan to look for a new job, the foundations of a successful employee retention strategy become clear.
Topping the list is a lack of promotional opportunities, cited by 43% of people who plan to look elsewhere. This is followed by an uncompetitive salary (39%), poor management style or workplace culture (37%) and a lack of new challenges (33%).
For managers with tight budgets, the good news is that salary ranks second in the list of factors driving people out the door. With a lack of promotional opportunities impacting turnover the most, employers can revisit the development and progression opportunities they offer to help stem the loss of experienced staff and retain highly motivated candidates who are driven and committed to succeed.
But while staff value career progression, we found that just 16%of employees expect to receive a promotion in the year ahead.
The advice therefore is to make development, progression and the associated provision of new challenges a priority once more. If you are wondering how to provide career progression to your staff, start by having one-on-one conversations about their career goals. This will help you understand what drives your employees and where they see their career heading.
Then consider how you can support the continuous development of their skills and career. For example, can you provide stretch opportunities outside their usual remit? Can you put a promotional plan with suitable and transparent KPIs in place? Can you offer coaching, get your employees involved in a relevant project or even offer training opportunities?
Provided you have appropriate talent within your organisation, mentoring can also support employee development and can be tailored around certain competencies required for promotion.
Don’t forget to check in with your staff regularly to discuss progress, give them the time required to upskill, address work-life balance and continue to support their mental health and wellbeing.
Crucially, take the time to plan how you’ll manage the salary expectation gap. After all, salary and benefits are a key component of job satisfaction and successful employee retention.
At any one time, managers have several balls in the air and retention might therefore seem like one too many problems to solve. But addressing retention sooner rather than later will keep you from losing your top talent in an active jobs market.
With employers adding to their headcount and the jobs market active, anyone who isn’t completely satisfied in their job will consider their options. So, unless you address retention now, people could begin to wonder if the grass is greener elsewhere.
With many professionals clearly not content in their current position, don’t leave your staff thinking their only option to improve their career prospects is to look elsewhere. Employ effective employee retention strategies to hold onto your top talent.
Our annual Hays Salary Guide FY21/22 is based on a survey of close to 3,500 organisations and more than 3,800 skilled professionals. Download your copy to access typical salaries, benefits and insights relevant to your organisation.
Nick Deligiannis, Managing Director, began working at Hays in 1993 and since then he has held a variety of consulting and management roles across the business. In 2004 he was appointed to the Hays Board of Directors. He was made Managing Director of Australia and New Zealand in 2012.
Prior to joining Hays, he had a background in human resource management and marketing, and has formal qualifications in Psychology.
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