Is retaining talent a new challenge? Maybe not, because even 100 years ago, research articles were covering the topic of why workers quit and how turnover reduces organization competitiveness!
For instance, a study from 1917 was the first to show that replacement and hiring could cost between 90 and 200% of a worker’s annual salary. Within the last decade, case studies confirm this large range, with replacement costs at 20 to 213% of the cost of one year’s compensation for that role.
It’s not just that turnover is expensive. In addition to replacement cost, turnover reduces overall productivity and lowers employee morale. This suggests that the root causes warrant attention in order to find the source of the leak.
During the pandemic, resignation rates spiked. In early 2021, more than 40% of employees surveyed said they were considering leaving their jobs. The age group most likely to quit a job in 2021 was young adults under age 30.
Most of the resignations were women because the industries that employed them were affected most by lockdowns, and they bear the majority of childcare duties whether or not they are partnered. In fact, child care issues were the major reason cited by one in four individuals who left the workforce in 2021 according to the Pew Research Center.
Job security is crucial to support employee commitment. They are thinking about their future, and are sensitive to whether they can advance their career. Even when employers invest in training to upskill their workers, employees don’t view their situation favorably without career development options in place.
This point deserves emphasis, because organizations often support employee development and expect it will promote loyalty. Employees are sensitive to career advancement opportunities. How employees rank organizational support for development predicts the probability of turnover. It shows us that employees need tangible next steps on their career path. Without these in place, no amount of training will rescue their hopes of a long tenure.
Employee retention reflects the work environment. This includes the relationship between employees and others around them, as well as the culture created by leadership.
In demanding roles that provide little interpersonal support, employees are more likely to experience emotional exhaustion. This can lead to burnout, but there are protective factors. With burnout on the rise, many organizations are eager to make the necessary adjustments that enhance employee engagement.
Work cultures that celebrate work milestones, remind workers of benefits, and have policies that reflect employee care can help to prevent employee burnout. Opportunities to connect to others at work may also be important, because workplaces that support employee friendships are also supporting their organizational commitment. In fact, workplace surveys reveal that 70% of employees say their friends at work are the most impactful to a happy working life. This aligns with research that finds stressful experiences are eased by social interactions.
Almost a quarter of employees described a shift in working conditions since the pandemic that demands more of their time. Yet the American worker has not seen more opportunities to vary or adjust their work times since 1977, even though total work time per week has increased! The salaried employee has certain advantages, but when the scope of their duties increase, their hours reflect it.
Almost 68% of managers believe employees should work as many hours as needed to complete their tasks. When employee work times increase without compensation, employees notice. They talk about it with their spouses and friends. And, they feel less valued.
Studies suggest that employees who work more than 40 hours per week are highly sensitive to their wages. But higher wages are not always a preferred way to address retention issues. Many companies cannot adjust pay and prefer other options to address retention and commitment.
Other supportive options show efficacy in helping employees feel valued. For example, there may be resources to help employees cope with time scarcity, to organize daily tasks, and to simplify work flows. Options to learn better stress management skill and how to build mental resilience can also help.
One issue with limited time is that employees tend to use resources they’d prefer to allocate to family and hobbies. They need that time to recover their work and life enthusiasm. Employees are highly aware that work-related duties can interfere with relationships at home and contribute to work-family conflicts. Many view their role at home to be a key indicator of whether their jobs are a good fit. This idea is consistent with studies that suggests that employers who support a healthy work-life balance can gain better employee commitment.
In some industries, diversified work schedules can improve job satisfaction. Surveys find that flexible work hours are sought after and can help retention. 4-day workweeks are highly desirable, with employers who advertise 4-day roles seeing a jump of 30% more applications. This can support work-life balance without reducing profitability.
As Treo’s Global Wellness Researcher, Karlie uses recent research findings to support healthier daily habits. Karlie earned her doctorate in Neuroscience and Behavior and bachelors in Health and Exercise Science.
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