Will Retention be 2023's Biggest Recruitment Trend?
Keeping staff happy and motivated is more important than ever as the war for talent continues.
We’ve heard a lot about people leaving their jobs over the past two years. As COVID restrictions began to ease and society started tentatively opening up, millions of people around the world quit their roles voluntarily in a phenomenon widely labelled the ‘Great Resignation’. There has been plenty of analysis on the factors that made employees resign in such large numbers, from a desire for greater flexibility at work to reports of the pandemic causing people to reflect on their priorities.
Whatever the reasons behind the Great Resignation, however, one thing is certain: it shook up the job market. Now, given the uncertain global economy and ongoing cost of living crisis, candidates may be less hasty to quit their employment outright – though knowing there are options out there means that companies will have to do more if they want to keep their best talent. Furthermore, there was a hectic post-pandemic recruitment phase that now seems to have quietened down. As such, holding on to staff is still paramount even if hiring activity has slowed.
With this in mind – not to mention the average cost of training new staff – retention may well be 2023’s biggest recruitment trend. This might sound odd coming from an executive search firm, but it’s a topic that has come into sharp focus since the pandemic and only looks set to increase this year.
Managing expectations - on both sides
The benefits of holding onto your staff are numerous; retaining intellectual property, experienced management, and cultural ‘value-adders’ can be the difference between you hitting or missing your corporate targets. Furthermore, when good people leave, others follow. In her book Retention: Key Mindsets That Retain Top Talent, Colene Rogers notes that there is always a cost to the employer when staff move on: ‘Because employees typically have the power of choice, it is up to employers to give them reasons to stay.’
Nowadays, businesses increasingly need to think about the typical employee lifecycle. You can expect to retain personnel for two to five years, on average, before they make plans to leave. As such, you should remember that it’s okay to lose someone who has lost the passion and commitment to add value to your organisation. If and when their time with you comes to its natural conclusion, be prepared for your employee to leave; perhaps even consider helping them to land a new role.
But a lot has to happen until you get to that point – if it even comes at all. So, what can employers do to keep staff happy and motivated? Of course, you are never going to prevent competitors from attracting your staff entirely – but you can put it off as much as possible, and get the most out of your talent, by following these top tips from our consultants, with added insights from our network...
Compensation
This one should go without saying. Money may not be the only reason why people look for new jobs, but if you’re not offering your employees fair, equitable salaries, you risk losing them. Companies struggling to meet market rates have had to consider their organisational and hierarchical structures; workforce planning, alongside retention, has been thrown into sharp focus.
In addition to wages, think about the benefits you offer staff. Are these in line with what might be reasonably expected for your sector, or could you provide more? Tailoring benefits in line with your organisation’s demographic split is a good idea. For example, new parents – who are often highly-skilled employees you would rather not lose – will jump ship straight away if your parental leave is sub-par.
Separately, we’ve seen a lot about retention bonuses lately. While these are usually beneficial for the candidate, their efficacy for businesses is debatable. In our experience, corporate attrition tends to occur regardless of loyalty bonuses. Many companies might be happy to use formal financial incentives to keep their best talent, such as long-term investment plans (LTIP). The promise of cash or stock rewards for meeting targets can be attractive, and the time stipulated before these are granted (commonly known as the ‘vesting period’) allows organisations to foresee potential attrition better. While there is nothing to stop the candidates from leaving anyway at the end of the vesting period, prospective employers are more open to guaranteeing such payments than they once were. With companies now more comfortable offering sign-on bonuses and one-off payments to cover unvested stock, however, long-term incentives may not be as useful for retaining talent as they once were.
Flexibility
COVID shifted working patterns in many industries, the effects of which are very likely here to stay. For instance, while debate around home working continues, the fact is that many employees enjoy the flexibility that full-time or hybrid working from home setups offer – often with productivity even reported to increase. Remote working can also broaden the pool of candidates available to fill a given role. Furthermore, flexible work setups can be especially helpful for talent negotiating other circumstances or responsibilities, such as illness, pregnancy, or caring for a family member.
There is no one approach to working from home that will suit every company or employee. Indeed, remote working arrangements are often less desirable – or even not practicable – for very senior or C-suite roles; many companies hiring C-suite staff seek visible leaders. Nonetheless, where possible it is important to give your talent flexibility and embrace the prospect of a hybrid working model – while pre-empting any potential issues that this might raise. How can you make sure your office remains somewhere people will want to go? What is the right balance between finding the perfect candidates you may rarely or never actually see and engendering the kind of camaraderie that only meeting in person can provide?
These questions all concern the pros and cons of hybrid/remote working, but also tie into another crucial aspect of retention: workplace culture.
Culture
Company culture is frequently cited as a top reason why employees leave their jobs, whether because they are not a good fit or because structures or atmospheres they knew and liked have changed. Are your staff on board with your firm’s values?
If a candidate is not a good cultural fit for your organisation, in the long run it is simply not worth considering them – no matter how talented they are, or how much they appear to meet the role’s criteria. ‘Retention of talent starts in the recruitment process’, says Carolyn Prowse, Chief Commercial, Customer, Strategy and Network Officer of Vueling. Compromising on togetherness for the sake of experience alone is not worth it; Prowse believes in ‘ensuring the team feels empowered, supported, and unafraid to try new things; creating an environment where the team feel challenged but know that you have their back [...] an environment where it is okay to "fail fast and learn"’. Retention can also have a knock-on effect when it comes to hiring. In the words of Perfood CEO Dominik Burziwoda: ‘Great people attract great people.’
Separately, has your business seen big changes recently? Significant transformations to a company’s organisational structure – as might occur during a buyout, for example – can provoke rapid cultural shifts that risk alienating employees and damaging morale.
Be sure your staff are on board with your business practices, and that allowances for hybrid or remote work do not come at the cost of compromising on team spirit; everyone should feel included. The company’s goals and purpose also need to be transparent – people should know what they’re working for. You should be clear about your company's three- or five-year plan if you expect your employees to align their careers with your business. Show them that there is a bigger cause worth working hard for and you will be surprised at how much productivity you can garner from your employees. Companies without a clear set of priorities and goals have always found it harder to keep talent.
Wellbeing
We’ve talked about company culture driving people away – but what about the working environment as a pull factor?
Not only is showing interest in your staff’s happiness and health the right thing to do, but keeping your employees contented improves their motivation, in turn driving retention. Taking real, meaningful steps to protect their wellbeing is key here. There are numerous ways to go about this, from providing flexibility and help for employees going through transitional periods and making efforts to improve diversity, all the way to establishing dedicated mental health support systems. Perks and benefits packages are nice, but people will always value feeling valued.
Development
Keep things fresh by giving your staff room to grow. Does your company offer training for employees that are interested in developing their talents, let alone those that may need extra direction?
People frequently mention stagnation in their current role as a motivator for wanting to leave. Some may want to be functional specialists for their entire career – but employers should be brave and guide employees who want extra challenges at work, rather than discovering this too late when they hand in their notice. Make sure your best people are in the right seats.
Management
An open-minded approach to training and developing staff should extend to management practices, too; we often hear from candidates who believe they have been denied opportunities for promotion because of their age. Don’t be afraid to promote people early – if they’re good enough, they’re old (or young) enough! However, as with the previous point on development, you must ensure that there are structures in place to provide adequate leadership training; don’t assume that even the most able and talented employees will necessarily make good managers without proper direction. (We plan to feature another article soon on training and paths to management roles soon – watch this space.)
Current managers should also think about the best ways to make their team cohere. Bigger questions about the direction of the company may be out of your control, but there are still plenty of things you can do to give your charges the support they need. Are you having regular check-ins with your group, as well as one-to-one meetings with the employees reporting to you? Finding a balance between being available and making sure your team are on top of their work – while giving them space to get on with their tasks – is essential.
‘Trust in your team and value their contributions,’ says Dominik Burziwoda. He recommends automating more arduous processes where possible, allowing employees to focus on their strengths and adding value. Giving staff room to do their job is simple: ‘Don’t bother with unnecessary bureaucracy, provide high-quality equipment, and pay well,’ Burziwoda advises. ‘Deep dive where it’s helpful, but don’t micromanage for the sake of it.’
Conclusion
John Burke, SVP of Enterprise Partnerships at GoCity, is similarly clear-sighted about what businesses must do to retain key employees. ‘Your best people will only remain within your organization if it contributes to the betterment of their world’, he notes. Accordingly, companies need to deliver for talent in three key areas: profit (‘you must ensure your stars come out ahead on their individual priorities, be it financial, work-life balance, or other’); purpose; and partnership. ‘”Hierarchical submission” is dead,’ Burke says of this last point. ‘Your stars want to inspire as much as be inspired and leaders must value everyone equally, or nothing else you do will matter.’
In Retention, Colene Rogers notes that ‘leadership should be judged by the standard of doing what is right for the betterment of others’. This is a useful maxim to bear in mind for holding on to your best talent – if you treat your employees well, the other details will follow.