Finding and acquiring talent is a real challenge employers face today. Talented employees are in limited supply, and are very much in demand. As a result, recruiting these talented employees can be costly, especially for smaller employers who have smaller resources.
Talent is difficult to find, and it is befitting that employers do everything to retain it and provide right conditions for career development. But what really makes employees stay?
In the Workforce Retention Study of the American Psychological Association (APA) in 2012, there is a number of reasons cited why employees stay with their current employers. And the top five reasons are the following:
Some were surprised pay did not emerge as the number one reason why employees stay. This is testament that no matter how much money workers get paid to work, if the work is not fulfilling and meaningful, they will be less incentive to stay.
A fulfilling job is a job that gives a worker a sense of purpose and more opportunities to make a difference. A fulfilling job enables a professional to meet his career expectations, or even get so much more learning and experiences.
An old proverbs says, “All work and no play makes Juan (or John) a dull boy”. The same is true with your employees. When employees become too absorbed in their work, their personal lives might suffer dearly. At the end of the day, it affects their productivity. And that’s bad for your firm.
The lack of work-life fit or balance is usually due to the lack of flexibility in the workplace, or putting in too many hours working. For aspiring professionals continuing their studies, a not so flexible working schedule would be a hindrance to their personal educational development. Another example are mothers who have returned to work after having children. They have more responsibilities at home, and still has to work. That means a greater need for a better work-life balance.
It is not surprising that the workforce retention study places “benefits” third in the list of the top reasons why employees stay, as various labor and management studies reveal that there is a strong correlation between good benefits, and worker productivity. Meaning, the more you reward your employees in terms of benefits receive, the more dedicated and productive employees become. That also means, a bigger chance at talent or workforce retention.
Benefits may come in various packages, but it is usually geared towards career development and incentives. A study by Ruchi Sinha published in the European Journal of Business and Management says one of the factors that helps retain employees is the opportunity to learn and try new things.
Finding the salary sweet spot of your employees is a great incentive for them to stay. Basic human nature dictates that with more money comes more commodities to support our needs, thus more stability and chances for social mobility.
Although, we recognise that creating a compensation structure that supports an employee development program is a distinct challenge for various firms. Nonetheless, investing in a quality human capital is worth the price. Otherwise, with high turnovers, you might end up subsidizing your competition (when talent transfers to them).
Included in human’s hierarchy of needs is the need for belongingness. Studies have shown that effective communications inside the workplace improve employees’ ability to identify themselves with the company and build a better sense of camaraderie, trust culture, and openness. The same study by Ruchi also revealed that employees stay when they have strong relationships with their peers at the workplace.
While studies showed that money does make a difference, it is not the end-all solution to employee retention. To foster job satisfaction and retain employees, companies must balance many factors, both tangible and intangible. Firms simply cannot afford losing valuable talents and end up subsidizing the competition instead.