A healthy economy poses risks for staff retention, writes Lorraine Thomas, pictured, managing director of search and selection consultancy Metzger, which operates in the professional security sector.
Here at Metzger, working with our clients is a useful barometer of employer sentiment and there is definitely an air of renewed economic confidence out there. The economy is steadily picking up and figures show that unemployment is at the lowest levels since 2008, and more of the jobs being created are full-time according to research, which indicates that job security is finally improving.
In short, the economic outlook is rosier than it has been for some time, which of course is good news for most of us. But an improving economy can present challenges for employers. Talented but unhappy staff are far more likely to seek better opportunities elsewhere in a buoyant market, and even those who are mildly dissatisfied could more easily be tempted away with an interesting offer or appealing package.
2015 has already been dubbed ‘the Year of the Candidate’, reflecting a shift in power from employers to staff, and more than one in three UK employees now feel confident that they would be able to find a new job within six months should they choose to move according to a recent survey by Glassdoor. So, should employers be concerned?
Certainly in our experience, most companies recognise that reducing employee turnover is desirable, and that retaining staff long-term can boost productivity, improve customer service and reduce costs. But to hold on to staff long-term, it’s essential to develop a clear and measurable retention strategy. This needn’t be complicated – it’s much more about understanding people, the different factors around motivation and the reasons why employees stay or leave. Contrary to common belief, it’s not all about money and reward. While it’s important to pay the market rate, paying well, by itself, won’t buy loyalty, motivation and commitment from employees.
What makes a good retention strategy?
The basic first-step rule is to have an effective and targeted recruitment process in place, in order to identify and select the right person for the role and the business. Ironing out potential mis-matches at this early stage is obviously far more efficient than losing a staff member further down the line. And people who feel that they don’t ‘fit’ within an organisation, or who feel insecure or frustrated in their role, are far more likely to leave than those who settle in well and enjoy their job.
Longer-term, a good retention strategy becomes much more focused around issues like training and development. Don’t believe the mythology saying that if you train people they just leave. There is much more evidence to support the notion that people will stay after training rather than exit a company. Correspondingly, people are much more likely to leave if you don’t train them!
Are your managers effective?
In many companies, it’s the employee’s line manager who may have the most influence on whether that person leaves or stays. A good induction, training opportunities, job content, the scope for promotion and progression and regular feedback will all make a huge difference.
Good managers usually deliver high retention as a by-product and now more than ever, employers need to make sure that their line managers possess excellent people management skills. Managers must play their part in creating an environment where employees feel they can make a valued contribution – and get recognition for it.
Flexibility
Being responsive to employees who have a need for flexibility in hours or location can also make a huge difference to how staff view the business. There is now much more evidence that, when choosing between employers, candidates are looking for working patterns that allow them to balance home life, family and work. The key here is to look beyond the notion that it’s simply female staff with children who require flexible hours – the rising demand for paternity leave indicates that many men would like the chance to finish early on a Friday or work from home when possible.
In my view, something that can get overlooked is the importance of tailoring incentives and reward to suit individual staff. After all, motivation is sparked in different ways for different people. For senior candidates and leaders, the scope for interesting projects and strategic challenges in a role is critical. More junior hires and those just starting out in their career are likely to assess what training and accreditation schemes are on offer.
While a successful retention strategy does not solely revolve around salary, rewards can certainly be an influential factor. Many large companies now offer a package of ‘pick and choose’ rewards for their staff, ranging from gym membership, healthcare, cycle to work schemes and childcare vouchers, which help to make staff feel valued and able to exert choices that suit their own needs.
In a buoyant job market, where attracting and securing talent is often one of the biggest challenges for employers, getting your retention strategy right is crucial. There is no one-size-fits all answer, but setting clear goals, making people feel valued and involving them in decision-making all make a contribution to improved motivation and retention. Even the simple ‘thank you’ at the end of a difficult week can make a huge difference – and of course, it costs nothing to be appreciative!
