Changes in the workforce are happening all across the world.
A recent study reveals that 49% of workers worldwide work longer than they prefer. This has led to a record number of employees quitting their jobs, and more than half of Generation Z employees (currently aged 16 to 26 years old) are contemplating a career change within the following year.
- The modern workforce seeks purpose, with 93% of employees valuing a sense of purpose in companies.
- Employee retention involves creating a supportive work environment to prevent talent from seeking opportunities elsewhere.
- Factors like feeling valued, workplace enjoyment, and aligning with organisational purpose drive employee satisfaction.
- The future of compensation includes more frequent pay raises, value-based rewards, and pay-for-skills models.
- Career pathing, constructive feedback, and individualised development strategies are crucial for employee retention and growth.
People Want Purpose
The modern workforce is not just looking for a paycheck but a purpose.
A US study found that 93% of employees believe companies must lead with a sense of purpose. As employees seek more meaning in their work, employers must recognise this shift and adapt their strategies to retain talent.
What is Employee Retention?
Employee retention is the organisational goal of keeping talented and skilled employees engaged and committed to long-term employment.
The Unsurprising Truth About Employee Retention
Employee retention is essential in Australian businesses as it helps reduce financial loss and operational disruptions caused by high employee turnover.
It’s easy to explain why employee retention is essential, but what can leaders do about it?
What Helps Employees Thrive Around The World?
Evidence from nearly 11,000 people reveals that winning organisations are becoming more relatable. Yes, relatable. As in engaging, empathetic, responsive, sympathetic, understandable, and accessible. In other words, the workplace of the future is psychologically safe and more human than ever.
The 2022-2023 Global Talent Trends study highlights crucial factors for employee satisfaction globally. Top responses include feeling valued, engaging in fulfilling work, experiencing workplace enjoyment, and finding a sense of belonging.
Other factors that improve employee satisfaction (and therefore keep employees engaged) include having a manager who advocates for them, feeling empowered to make decisions, the ability to integrate life and work seamlessly, aligning with an organisational purpose they are proud of, and being led by leaders who set a clear direction.
The Future of Compensation in Employee Retention
As talent shortages persist, it is time to reconsider compensation.
The 2022-2023 Global Talent Trends study recommends that businesses:
1. Pay at the speed of work: Yearly pay reviews may no longer suffice as more frequent pay raises can better motivate and retain workers, especially for exceptional contributions.
2. Value-based rewards: Tailor rewards to employees' unique values, such as sponsoring education instead of pay raises, can enhance motivation through personalised offerings.
3. Pay for skills: Pay-for-skills models are gaining popularity, ensuring compensation aligns with market value and the actual cost of labour, especially for in-demand digital skills.
5. Team-set salaries: Some companies are experimenting with team members participating in compensation decisions, prioritising equity and competitiveness.
Unravelling Workplace Culture: What You Didn't Know
A survey conducted by LinkedIn in 2021 revealed that a healthy work-life balance is the highest priority for job seekers, surpassing even outstanding compensation and benefits.
The days of employees reporting to an office and working from 9 to 5 are over. Employees want to keep their flexibility after working remotely and in a hybrid environment for over two years.
According to data from LinkedIn, flexibility is now a significant factor in determining employee satisfaction. Employees who choose their work location and schedule are 2.6 times more likely to report being satisfied and 2.1 times more likely to advocate working at a company.
However, flexible work can harm company culture if not managed with care. Employers will have to exert considerable effort to foster and maintain relationships between employees who work in various locations.
Specific jobs cannot be performed remotely, indicating that many employees will not have the same opportunities as their peers. Employers are beginning to address this issue by offering frontline employees job sharing, compressed workweeks, and other scheduling options designed to level the playing field.
Can Career Planning Solve the Employee Retention Challenge?
Two-thirds of employees have recently contemplated leaving their jobs due to a lack of opportunities for skill development, career advancement, or transitioning to new roles or career paths.
Career pathing is the process of developing a road map to assist your team members in achieving their professional goals. It may include activities, transfers, and promotions that bring employees closer to their short- and long-term career objectives.
It has been demonstrated that internal mobility increases employee retention. After two years, an employee who has made an internal transfer has a 75% chance of remaining with the company. This decreases to 56% for those who have not changed roles. Career progression facilitates the identification and promotion of internal talent.
Individualised career development strategies to assist each employee in achieving their objectives. This may consist of online learning courses, stretch assignments, certifications, coaching, and mentoring to acquire the skills necessary for their next career phase.
Can Constructive Criticism Fuel Growth?
Feedback is a powerful tool for growth.
It provides insights into strengths and areas for improvement, fosters a culture of continuous learning, and ultimately leads to higher performance and job satisfaction.
But it has to be done in a productive, psychologically safe way.
In his book No Rules Rules: Netflix and the Culture of Reinvention, Reed Hastings, the co-founder and co-CEO of Netflix, emphasises the importance of constructive feedback.
He believes that feedback should be given regularly, not just during annual reviews, and should be honest, specific, and actionable. This approach fosters a culture of continuous improvement and helps employees reach their full potential.
Reed Hastings recommends that feedback be given in a respectful and supportive way. He suggests using the "4A" framework:
1. Aim to Assist: The input should help the person improve.
2. Actionable: The feedback should be specific and guide what can be done differently.
3. Appreciated: The feedback should be delivered to show appreciation for the person's efforts.
By following this framework, feedback can be delivered in a constructive and supportive way rather than critical and demotivating.
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These sessions aim to help you harness neurodiversity, creating an inclusive environment for all employees to thrive and fostering innovation and resilience within your team.