Our recent research found that retention has grown to become HR professionals’ top priority, as discussed in our State of Employee Engagement 2023 report. And, while the industry clearly understands the importance of keeping hold of your best people, it’s not getting any easier.
Our survey revealed than an overwhelming 89% of respondents believe the retention conundrum was either getting more difficult, or not changing, and just 11% said retention is getting easier. That’s a huge percentage of organisations losing the knowledge and expertise that has been built up by employees who decide to leave.
Retention isn’t only a people challenge however, it’s a financial challenge too. According to the Society for Human Resource Management, the average cost of replacing lost employees is equivalent to six to nine months of their salary. So clearly, if you don’t understand why your people are leaving – or why they’re thinking about leaving – you’re fighting a losing battle. Regular pulse surveys and thorough exit interviews are your secret weapon.
Understanding the challenges ahead
When it comes to the biggest challenges associated with retention, 45% of participants cited their ability to offer competitive compensation. This suggests that it’s very much still a candidates-driven market, with a lot of choice and the option to move jobs for more money.
Another notable challenge is meeting the career development needs and expectations of employees. Our survey showed that 27% of HR professionals find it difficult to satisfy these demands, and people are leaving these organisations as a result.
Interestingly, flexible and hybrid working arrangements, which once posed significant retention issues, are a shrinking retention issue, with just 11% saying this is a current challenge. Perhaps because most organisations that are able to do so have already nailed down their flexible and hybrid working policies.
Mapping out the future
Despite the hurdles, companies must strive to build robust retention strategies. These should encompass competitive compensation packages, clear career progression paths, and adaptable working conditions. By understanding and responding to the evolving needs of employees, organisations can successfully tackle the retention conundrum.
Employee retention is not just an HR issue; it’s a business priority. Organisations must foster an environment that encourages growth, recognises achievements, and values its people. By doing so, they can ensure their best talent stays within their ranks, contributing to long-term success and stability.
This article contains a snippet from The State of Employee Engagement 2023/24. This report draws on insights from over 450 senior HR practitioners to understand their key priorities and challenges going into 2024, including key insights on employee listening, employee engagement, retention, recruitment, and productivity & performance.
Download the full version of the report here as we dive deeper into HR’s four biggest priorities. To view all our other eBooks, click here.