With more job vacancies than ever before, talent retention is hot on many people’s minds right now.
There are a record five million more job vacancies than unemployed people in the US, with around 2.5-3% of the overall workforce quitting their jobs each month in 2022. Other labor markets find themselves in a similar position – in the UK, February 2022 saw a record 1.3 million unfilled job openings.
These numbers are huge, and this sudden scarcity makes holding onto the talent you’ve got an absolute priority. Here’s everything you need to know about the topic.
What is talent retention and why is it so important?
‘Talent retention’ is your ability to hold onto your employees once you’ve hired them. Are your employees sticking around for long, productive and stable careers, or are they leaving six months into the job?
At a very basic level, you should care about talent retention because it’s expensive to keep replacing employees. For hourly workers, you’re looking at $1,500 or more per employee, and up to two times a salaried employee’s salary.
Employee turnover and customer experience are directly correlated
The problem, however, goes deeper than one-off costs. High employee turnover makes it impossible for your workforce to build the knowledge needed to offer a great customer experience.
Gartner defines ‘customer experience’ as:
We can distill that down to something a little smoother, slicker and a bit more Kondo-esque: do interactions with your brand spark joy in your customers?
If not, you’ll quickly find yourself excluded from future purchase decisions. Two-thirds of companies now compete primarily on customer experience, and PwC’s Future of CX Report suggests that a third of customers would leave a brand they love after just one bad experience. 92% would completely abandon a company after two or three negative interactions.
If your employees keep leaving, you leak valuable operational knowledge that’s near impossible to replace – or even fail to build this knowledge up to start with.
Talent retention: why now?
We mentioned above that the COVID pandemic has sparked what’s rapidly become known as ‘the Great Resignation’. But why?
There are two main factors at play here:
- People have been reevaluating their priorities (work, life, family) and moving away from stressful, over-demanding jobs with little reward.
- Due to a combination of people leaving their jobs and staff shortages due to COVID, there are now many unfilled vacancies, which drives up salaries.
As a result, a talent retention issue long in the making has been transformed into a crunch point for many businesses. A pre-COVID Gallup poll found that companies with high employee engagement achieved:
- 10% higher customer ratings
- 17% higher productivity
- 20% higher sales
- 21% higher profitability
Now, with the Great Resignation in full swing, these strategic benefits have evolved further. With so many businesses experiencing huge slowdowns due to lack of staff, now’s the time for a great talent retention strategy that will really put you ahead of the competition.
Identifying and reducing talent retention
Employees come, employees go. It’s important to distinguish between one-off instances of employees moving on and wider trends.
One employee leaving because they found a better offer elsewhere is a fact of life. Several employees leaving for similar reasons in a short space of time might signpost something more concerning.
Mine that exit interview data (and, if you don’t do exit interviews, get started pronto!) and look for trends around the following:
- Work-life balance: if your line managers refuse to respect reasonable boundaries and demand too much from your employees, expect burnout and high turnover.
- No career progression: lack of career or professional development opportunities is one of the most cited reasons for leaving a job.
- Toxic workplace atmosphere: there will always be disagreements in a workplace, but if everyone seems to dislike each other on a personal level, there might be something deeper going on.
- Uncompetitive salary and benefits: sometimes, it’s simply about the cash. It’s difficult to keep employees when all your competitors offer better rates of pay!
Key talent retention strategies
So, you’re measuring employee turnover and picking up on some overarching trends that are damaging your ability to keep hold of talented employees. What do you do?
There’s no easy-fit solution here – but generally, the strategies below are a great place to get started. Use these as the cornerstones of your talent retention scheme and adapt to your own circumstances however you need to.
Identify signs that employees are about to jump ship
Prevention is better than cure, so they say. If you can make an educated guess that an employee’s thinking about handing in their notice, you can take action to bring them back to the fold.
Drop-offs in productivity (particularly among high-performing employees), refusal to commit to long-term projects and a lack of enthusiasm are all signs that an employee might see their future elsewhere. Re-engage them with training or exciting projects that will develop their skills.
Demonstrate that you will commit if they will
Investing time and money in professional development sends a strong sign that you’re prepared to support your employees over the long term. They’re more likely to stick with you if all their hard work is recognized with promotions, pay rises and good old-fashioned recognition.
Build in career development plans, coaching and one-on-one time with each employee as soon as they join your workforce. Emphasizing that you see this as a long-term partnership rather than a transactional exchange of services (“you work, we pay you”) lays the foundations for future success.
Use employee engagement surveys – and act on the results
Employee engagement surveys are your talent retention secret weapon. Use quick ‘pulse’ surveys to gauge sentiment on areas essential for talent retention, such as job satisfaction, workplace morale and benefits packages.
Act on any major issues you find – and let your employees know you’re doing so. Employees that see themselves contributing to their workplace are more likely to be invested enough to stick around in the long term.
Revamp your salary, benefits and reward offerings
When was the last time you looked at the salary and benefits package you offer? If it hasn’t budged since before the pandemic, chances are it’s no longer competitive.
And, whilst other factors were important, 68% of US workers who left their jobs in 2021 said that low pay was a factor – the joint most common response alongside lack of career advancement opportunities.
Take a look at where you are now, and where you could be. If you can offer a tempting rewards package and flexible working options, you won’t necessarily need to offer top-of-the-market rates – but you should aim to be at least above average for your industry to attract and retain the best.
Make it easier with a talent retention solution
Let’s be clear: new tech won’t solve your talent retention issues by itself. Equally, when combined with the strategies above, it can make your job a heck of a lot easier!
Any software that helps you reduce employee turnover is a ‘talent retention solution’, and could include:
- Employee productivity trackers to identify employees that are in danger of leaving
- Employee apps that improve engagement with the wide company and share successes
- Performance and coaching apps for employee development
- A learning management system so employees can develop skills and aim for promotion
- Survey tools to identify trends in large sets of pulse survey or exit interview data
- Reward apps to recognize great performance
- Wellness apps to help manage stress and symptoms of burnout
Essentially, talent retention solutions allow you to implement the strategies above with less people power. For example, your CEO can’t congratulate everyone on a successful project in person – but company-wide recognition from senior management on an employee app (like Blink!) will be warmly received.
Or, you may not have the budget or flexibility in working hours to offer all training in person. A learning management system helps employees pick up the skills needed to progress whilst on their break, so that the likelihood of them leaving for another position is reduced.
The time to act is now
Ultimately, talent retention has always been a powerful tool for businesses. Those that build and maintain strong workforces filled with driven employees perform better.
Now, thanks to the pandemic-driven Great Resignation, your ability to hold onto talent may be a make-or-break factor for your success over the coming decade. You’re facing unprecedented competition for talent, and this is likely to remain a problem for the medium term.
Improving talent retention will take time, resources and committed effort, but when you feel the effects of a stable, engaged and committed workforce, you won’t look back – trust us.
Blink can help you strengthen your talent retention solution. Book your free demo today.