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Employee retention: What’s your game plan?

Employees discussing staff retention
 
Why do good employees quit? And what can you do in skill-short market to try and retain them? Turnover can be costly and with the supply and demand ratio tipping in favour of skilled professionals, retention makes sense as a strategy.
 
According to the more than 4,800 skilled professionals we spoke to for our annual Hays Salary Guide, another 52% of employees are open to opportunities, and 15% are actively looking.
 
In the past 12 months, staff turnover increased for 58% of employers, and 35% believe it will accelerate in the 22/23 financial year.
 
Clearly, retention needs renewed focus, as there is more value in retaining top talent than the costly process of advertising, interviewing and onboarding employees. Retention becomes even more of a pressing concern when we consider that only 56% of professionals who responded to are currently satisfied with their job. 
 
At the same time, 61% of employers have told us they intend to increase their permanent headcount yet 83% believe skills shortages will impact the effective operation of their organisation or department. With a business sentiment and 61% of organisations looking to increase headcounts, it’s no wonder that there’s 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? Spoiler alert, it doesn’t just end with an increased salary.

The main drivers of employee attrition

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 an uncompetitive salary, cited by 49% of people who plan to look elsewhere. This is followed by a lack of promotional opportunities, 40% and poor management style or workplace culture (37%).
 
While an uncompetitive salary is a top reason, it isn’t a significant lead by any means when compare to the other drivers, which means it is now more important than ever to factor them into your retention strategy.

Employee retention strategies for managers: Start with salary

A competitive salary is clearly still a vital element in any proactive retention plan. This year, salaries are set to rise amid accelerating skills shortages. Employers now need to ensure they review pay regularly to ensure they align with typical external salaries.
 

Address career progression 

Make learning, development and on going training a key priority once more. According to Hays Salary Guide, only 18% of employers cite upskilling as a key strategy, meanwhile, 60% of employees said that learning or developing technical skills was important to them in their career.
 
There is an opportunity here that you can take advantage of to give yourself every chance of retaining highly skilled staff. There’s a clear desire among employees to learn while they work, and it can be up to you to provide that for them.
 
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 and will also ensure the learning content you provide will resonate with them.
 

Deliver purpose

More and more, we are seeing that employees need something more when they turn up for work every day. Instead of the usual 9-5, they want to work for organisations that deliver a purpose that reflects their own. Define and clearly communicate your purpose to ensure internal team and potential candidates understand and can align to it.
 

Sustainability policies are no longer optional

With climate change coming to the forefront, it means that organisations need to start implementing proper environmental policies and showing they have laid out a path to become a more sustainable business. Just like working towards a purpose, an environmental policy is important to a massive 86% of employees, with 34% saying it is a non-negotiable.
 

Review management style

Front line managers are also key to retention. Remember, people join organisations and leave people. Your managers should build a good relationship with their team members. They must motivate and inspire, lead from the front, managing performance and setting goals. They should understand, communicate and build good relationships with their employees – never assume anything about an employee but rather maintain open and honest communication.
 

Provide upskilling opportunities

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 and give them the time required to upskill.
 

Readdress benefits

Benefits are an important element in staff retention. Training and over 20 days’ annual leave are the top benefits employees want. While 81% of employers offer the former, only 23% offer additional annual leave, which indicates a new trend for any employer looking to create a stand-out retention package. 
 

Continue to evolve flexible working

Employees are hungry for continued flexibility, although their flexible working preferences continue to evolve. Almost two-thirds (64%) of employees will look for an adaptive hybrid approach when they next job search, consisting of a flexible schedule rather than set in-office and remote days. Over half want the scope to change work hours outside of core business times and one-third want compressed working weeks.   
 
Also address work-life balance and continue to support their mental health and wellbeing.

Act now

At any one time, managers have several balls in the air and retention might therefore seem like one too many problems to solve. But organisations are emerging from the struggles of the past two years at rapid pace, and strategies need to be introduced to be able to keep up with the rest of the crowd. Addressing retention sooner rather than later will keep you from losing your top talent in a job market that is experiencing narrow talent pools.
 
With employers adding to their headcount and the jobs market active, anyone who isn’t completely satisfied in their job will be keeping their options open. 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.  

Download the Hays Salary Guide

Our annual Hays Salary Guide FY22/23 is based on a survey of over 4,400 organisations and more than 4,800 skilled professionals. Download your copy to access typical salaries, benefits and insights relevant to your organisation. 

About this author

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.