It is essential for every company to retain talented employees in the long term. When an employee becomes unmotivated, dissatisfied, or frequently looks at available job opportunities, there's already an issue. But what could these problems be? And what can employers do to address the issue and retain a valuable workforce?
Throughout 2023, employers and employees alike face challenges in every quarter. Inflation, rising fuel and energy prices, and unfavorable economic news are affecting everyone, creating strong turbulence in the labor market. The wage spiral (rising prices, declining real wages, necessitating wage increases, which lead to higher prices for services and products, and so on), increasingly difficult and lengthy recruitment processes, significant turnover, and a candidate-driven job market are demanding new strategies from the HR profession, with retention taking center stage.
In a representative survey by Generali Insurance in January 2023, one in five respondents stated that they are considering changing jobs this year in pursuit of higher pay. The research also revealed that 42% of respondents hoped to save money in 2023, with 19% of them planning to change jobs in hopes of higher pay.
According to the latest survey by Work Force HR Services in August 2023, 62% of surveyed employees are planning to leave their jobs in the near future. This includes both knowledge workers and manual laborers, albeit with different proportions (knowledge workers at 60%, manual workers at 70%). The 62% figure is quite astounding, suggesting that the majority of these employees could potentially leave their jobs at any time but are likely dissatisfied with some aspect.
Among the motivations for leaving a job, higher pay remains a top contender, but Work Force's results also indicate other factors. 53% would prefer to work in a place where their contributions are better appreciated, while 42% cited the lack of professional development opportunities.
The Work Force survey aimed to provide an insight into the current state of turnover, and they not only surveyed employees but also their business partners. Their responses revealed that last year (2022), more than 10% turnover was observed. According to exit interviews, money was the leading cause (86%), but personal reasons and relocation often led to departures.
While competitive compensation is undoubtedly a crucial factor in retaining employees, it is by no means the sole consideration. Modern corporate approaches encompass various layers, including:
The ability to work remotely or have flexible work arrangements has become a crucial factor for employees deciding whether to stay or leave.
Prioritizing employee well-being can contribute significantly to retention. Offering sports facilities, health programs, and addressing mental health issues can help employees feel supported.
Employees value a healthy balance between their work and personal lives. When this balance is disrupted, it often leads to job searches.
Lack of career prospects motivates many employees to seek new opportunities. Providing opportunities for professional growth, mentorship programs, and clear career paths can boost employee commitment.
Employees tend to stay in workplaces where they feel valued and included. Promoting diversity in all aspects of the workplace fosters strong connections between employees and employers.
This year has presented numerous HR challenges, with turnover being one of the most prominent. It's expected that this trend will continue in the last quarter of the year, making it imperative to focus even more on retention strategies.