It’s a real challenge in today’s market to retain top talent — either in the IT sector, or anywhere else. For instance, Forrester reports that IT organizations are facing a 13.8 percent attrition rate, while the demand for tech talent “maintains a frenetic pace.” (Translation: there’s a huge need for IT professionals, and not enough workers to go around.) Of course, the ripple effects of the Great Resignation are still being felt across most industries as well. It’s not surprising that improving retention should be a top priority.
The question is: How can a business organization effectively retain top talent? Moreover, why is it vital to do so? Let’s start with the latter question, and discuss some key reasons why employee retention is such a big deal in today’s market.
Why is Improving Retention So Important?
According to one study, the average cost of a departing employee is $18,591. Of course, employee turnover in technical fields often comes with a higher price tag than that figure. And even when you factor in the costs associated with hiring, onboarding, and training a new worker, there are still many “hidden costs” that can impact a business’ bottom line. For example:
- Lost customers. If your departing employee has been instrumental in forging and maintaining client relationships over the years, then his or her resignation could mean the loss of several valued customers as well.
- Loss of productivity. Research indicates that it could take a new hire anywhere from one to two years to become “fully productive” — i.e., to be as productive as the employee they replaced. That’s a significant time gap. And it certainly underscores the benefit of keeping a “fully productive” team member on board for as long as possible.
- Negative impact on morale. The loss of a valued employee can negatively affect morale in a number of ways. For one thing, it could result in a weakening of company culture. Then again, the departure of a highly productive worker could mean that the remaining team members have to pick up the slack. As a result, they will experience exhaustion and burnout.
- Lost opportunities. Opportunity cost is the hardest factor to quantify but is often the most significant. Working without a full team, or with a team full of new hires, could result in scores of lost opportunities to grow your business.
Clearly, employee retention is key to sustainable success for any organization. Now, let’s examine how to achieve an exceptional retention rate.
How Can You Retain Your Existing Talent?
An effective employee retention strategy has many moving parts, and should never be reduced to a formulaic outlook. Put simply: in order to keep people on your team, you have to treat them as individuals. That means viewing each one as having his or her unique motivations, strengths, weaknesses, and goals. Insightful and empathetic management is absolutely essential in this regard.
Still, there are certain steps you can take on the organizational level that will greatly increase your odds of retaining top talent. These steps include:
1. Evaluate Equity and Engagement Across Existing Teams
One of the most important factors that contribute to improving retention is whether your team members feel like they’re being heard and respected. For example, one study found that strong transparency on the part of management results in a retention strategy that’s 30 percent more effective. In such transparent organizations, managers are inclined to withhold information with their team only if it is necessary to do so (as opposed to managers who only share information if it’s required).
Other factors to look at in terms of equity and engagement include:
- Whether employees receive regular commendation and feedback.
- If team members feel free to share their suggestions with management.
- Whether top performers receive rewards and/or recognition for their efforts (e.g., anniversary gifts, milestone rewards, achievement trophies, etc.)
2. Offer Continuing Education Opportunities
According to a survey conducted by The Doyle Group, 29 percent of respondents left their last job for more growth opportunities (compared to only 22 percent who left to seek a higher salary). The point? Employees are very interested in opportunities to advance their careers; and continuing education is a key avenue to help them reach their goals.
Does your company offer continuing education opportunities to employees? These could include offerings like Guild Education, Google Courses, or customized learning modules. Moreover, if you do offer such opportunities, are your team members aware of them? You are in a much better position to retain the services of top performers when you provide them with the means to expand their knowledge base and sharpen their skill set.
3. Hold Meaningful Exit Interviews
Exit interviews can be tough for both parties. For the departing employee, there may not be much incentive to divulge their real opinion of the company. For the interviewer, it can be difficult to tactfully draw out the employee’s thoughts.
However, exit interviews (when conducted properly) can be a gold mine of insights into your company’s cultural strengths, weaknesses, and opportunities for growth. If you can find out the real reason why people are leaving your organization, then you may be able to detect a specific trend. Once you have that knowledge in hand, you can look for ways to address the issue.
4. Conduct Annual Surveys Among Current Employees
Reaching out to your team members via periodic surveys is another helpful way to “keep a pulse” on the level of job satisfaction among your workforce. If you are trying to grade your company on specific factors, then limiting responses to a scale of 1 to 7 may be effective. However, there are also advantages to letting your employees comment freely on aspects of the work environment that they like and dislike.
In summary, improving retention plays a major role in organizational success. And by implementing the steps discussed above, your company will be in a prime position to keep top talent, and enjoy sustainable growth. For more helpful suggestions on how to make your retention strategy more effective, be sure to reach out to our team of experts at The Doyle Group today.