Employee Retention: A Major Driving Force in 2022

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The COVID-19 pandemic knows no boundaries; it has impacted everybody—individuals, families and employers. As 2021 draws to a close and reflections on ‘the year that was’ give rise to predictions for the year to come, one key area of focus for businesses will be Employee Retention. 

Call it Employee Engagement, Employee Experience, or otherwise, in the context of the “Great Return to Work” making way for the “Great Resignation,” businesses are all searching for the best way to keep their talented employees.

Trends and Priorities in 2022

According to the CIPD annual HR Practices in Ireland Survey 2021, the main priorities for the new year will be responding to COVID-19 and dealing with economic uncertainty. 

Responding to COVID-19 is challenging in its own right as it continues to evolve, but it is also contributing to the constant churn of economic uncertainty. How can organisations realistically plan and set goals to minimise the impact of a hazard like employee turnover (the Great Resignation) as projected in risk assessments?

Organisations are increasingly leaning in on their Human Resources departments, becoming more strategic in protecting and managing their most valuable asset: their employees. This is of particular concern right now for some sectors, such as Hospitality and Construction, that are currently experiencing difficulties in securing staff.

To say the pandemic caught us all off-guard would be an understatement, but the aftermath is going to be equally challenging. Employee expectations have changed and differences are appearing between what the traditional work environment had to offer versus what employees now want (and expect). How will organisations bridge this gap and retain their employees?

 

What Is Employee Retention?

Employee retention is the ability of an organization to keep its employees from leaving.

In other words, it is about reducing attrition by making the existing company a more attractive place to stay. People leave jobs for many reasons, so a certain amount of turnover is normal—and it has to be said, in some cases, it is the better option for both employer and employee.

 

Why Is It Important?

There are several reasons employee retention is so important, including:

  • Positive retention strategies demonstrate to employees that they are valued.
  • Retention actively protects employee knowledge and experience.
  • Experienced employees can serve as valuable coaches and mentors for new employees, supporting their professional development and career progression.
  • The cost of replacing an employee is approximately 1.5 to 2 times their annual salary. 
  • Recruiting and securing a new employee is a lengthy process.
  • Turnover negatively impacts productivity as new employees have to be trained.
  • High turnover negatively impacts morale for those left behind.
  • Losing an employee might mean your competitor gains an employee.

For their part, employees want to feel valued, to have a purpose, a sense of belonging, and certainty at work (which may be difficult to achieve under current circumstances).

It is a tall order for any organisation to fulfil the desires and expectations of all employees. A new study has found that 42% of Irish workers intend on resigning within the next 12 months—a figure that jumped from 21% prior to the COVID-19 pandemic.

The Workhuman IQ Fall 2021 International Survey Report tracked 3,500 employees in Ireland, Canada, the U.S., and the U.K.  Derek Irvine, Senior VP of Client Strategy & Consulting at Workhuman, said employers must take action now to prevent “unprecedented” levels of staff turnover. He continues by saying: 

“It’s clear that organisations need to make employee retention a strategic objective, creating environments where employees are recognised and rewarded for their contributions, and where employee needs are front and centre of the decision-making process.”

 

How Can Companies Increase Retention?

It would be incorrect to assume that employees are only motivated by money, although it helps! 

Employees are actively researching prospective employers with questions about workplace culture, including: 

  • Do opportunities exist for development and career progression? 
  • Is there a diverse workforce, open to including people with disabilities, who are LGBTQ+ and ethnic minorities? 
  • Are there opportunities to get involved in local community projects? 
  • Are there family friendly policies and provisions for work-life balance? 
  • What happens if I get sick and have to be absent from work? 

This list could go on and on…

As said earlier, retention is about reducing attrition by making the existing company a more attractive place to stay. With a clear employee retention plan in place, employees will want to stay. A retention plan will address topics under the following five areas of interest:

  • Work environment
  • Culture
  • Benefits
  • Development opportunities
  • Employee recognition

Organisations that champion diversity, equity, and inclusion demonstrate they are putting employees’ needs front and centre. This is an employer of choice! Who would not want to work here? Imagine the difference it would make to organisations undertaking recruitment campaigns—there would be no difficulties in attracting talent!

 

Being Proactive to Promote Retention

The impact of organisations doing nothing is clear—some do not even conduct a proper exit interview, which is really too late to be asking why the employee is leaving. 

Solicit feedback: Engage with employees. If they are experiencing difficulties, support them and explore early interventions to maintain their work. If they are absent, support them by planning their return to work. (A highly recommended provider is available to help you here!)

Embrace flexibility: The future of work is going to be about providing flexible work environments in terms of place, time, job description, and career path. Are you ready for it? Have employees been consulted about what they would like? Examples include hybrid working, flexible hours during the day to help with family needs, etc.

Expand recruitment: Look beyond the usual candidate pool, and see past the standard qualifications. Consider hiring job seekers who don’t quite fit your profile. An example of an organisation doing just that is IBM, where U.S. job openings do not require a four-year college degree. With the right mindset and support, people who come up a bit short on paper can learn to fill in the gaps and will be your most loyal employees.

Broaden language: Use words and tone that are inclusive to diversity. We are all human. We are capable of work, but life throws adversity at us and sometimes all that is needed is support. Employees need to know they will be looked after if they get sick and become absent. In light of what we have all experienced during lockdowns, mental health is at an all-time low and employees are in need right now of compassion and understanding as they begin their return to the workplace.

 

In summary and a final thought….whatever is in store for us all in 2022, we have learnt that social connection is important to us all. Work is a big part of our lives and we want to reconnect with it in a way that provides meaning and purpose. 

People are emerging from COVID19 lockdowns with different expectations – and they are not afraid to ask for flexibility to meet their needs. Employers may be challenged to meet these needs, but when they do, I imagine the results will be great success stories with inspirational leaders which we will read about in years to come.