Let’s talk about employee retention. Why does it matter that your employees stick around for longer?
First, with the current labor market, companies are finding it harder to find new talent to join their companies, which makes it all the more important to shift the main focus from recruiting new talents to retaining existing ones and meeting their needs and priorities. When an employee leaves, the company doesn’t just lose their skills and expertise, the employee leaves a potential gap in the collaborative and communicative flow they were influencing in the workplace.
The priorities of the current, young workforce is also different from what it used to be. Labor mobility has become flexible in the past decade and young workers are less inclined to stay loyal to a company than their older counterparts, making it increasingly harder for companies to retain their employees. Not to mention the high cost per hire and the time it takes to train new employees, an employee leaving is a great loss for companies.
So what can companies do to increase employee retention?
What makes sense is to first look at the Attraction-Selection-Attrition Model (ASA Model), which puts organizational culture at the center of employee attrition. Employees and companies both have a set of values and personality characteristics and whether an employee decides to stay with a company, at the core, depends on an alignment in these factors.
At the beginning stages, employees are attracted to companies that represent their values and priorities. Companies do the same in their selection process by actively recruiting candidates who would best fit in with their culture. In the end, these two processes result in the attrition rate. People who find that they actually don’t fit in well with the company culture would eventually decide to leave the company. These reasons could span anywhere from dissatisfying compensation packages to lack of development opportunities. All in all, when an employee decides to leave, it’s due to a mismatch between their values, personality and priorities and those of the company they work for.
In order to keep employees motivated and engaged in your organization, you have to reassess the culture that you’ve built and how your employees currently fit in with that culture. Traditionally, those types of assessments would be done by individual interviews to qualitatively understand the workplace culture, but these days data can be easily leveraged to quickly obtain these insights and to better map and visualize the information.
Once all this information is available to you, it can also be fed back into the recruitment process when you do go out to look for new talents. Many companies still rely on references, or manager-conducted interviews to test the cultural fit between the company and candidate but these methods can be riddled with human errors and biases. By utilizing data-driven insights you can more accurately assess the fit between new candidates and your company, cutting down on the potential costs of attrition in the long run.
Now that you know this, here’s what you can do.
If you’re struggling to find new candidates, first shift your main HR strategy focus from recruitment to retention.
Start reassessing your company culture by asking these questions:
- Is your company hierarchical or flat? Are the interactions between colleagues more formal or informal?
- Is your company more people-oriented or task-oriented? Is it more about how employees are motivated, or is there more emphasis on getting tasks done?
- Is your company collaborative or competitive? Are employees rewarded individually or as a team?
- Start asking your employees what they prioritize and value in a work environment and start looking for gaps between the company culture and employee expectations.
You can always start the process qualitatively to understand the gist of your company culture but consider going quantitative to efficiently produce precise and accurate insights on workplace culture and employee fit. Digital solutions in HR now extend past Human Resources Information Systems (HRIS) that tackle administrative functions–there are tools for recruitment, assessments and engagement as well.
Want to know more about how to leverage data for impactful outcomes in your organization? Get in touch with us!