Just a generation or two ago, it was the norm for workers embarking upon a career to start a job right after school and stick with the same company until retirement. Today, however, the situation is vastly different and employee quit rates are hovering around record highs. There are a variety of reasons why people quit, but regardless of the reason, job hopping has become the norm — and it looks like it’s here to stay. In fact, 60 percent of millennials have indicated they’re currently open to new job opportunities.
But even though a lifetime commitment is no longer a realistic expectation for employers, that doesn't mean your employee retention strategy is a lost cause. Keeping your staff intact — especially your top performers — is critical for staying competitive in today's economy. But how do you tell the difference between a retention crisis and normal, expected employee turnover rates?
Here are four signs you've got a retention problem.
1. high levels of employee turnover
This one may seem like a no-brainer, but it may not always be so obvious — especially since a river of exiting employees often begins as a mere trickle. There are significant business costs to replacing employees, so it’s crucial to stanch the flow as quickly as possible. It’s also key to keep office morale steady when there’s a mass exodus of familiar faces.
Low compensation, limited career paths and issues of work-life balance are all common reasons employees leave their jobs, so you must take action today to diagnose the root cause of the employee retention issue at your organization.
2. employee tenure is shrinking
Maybe you're not facing a crisis yet, but HR records show you’re hiring more frequently than you used to, and employee turnover is occurring at a faster rate. If your employees are leaving to take on new roles, that means they were either looking for a new job soon after joining or were successfully poached by another employer. They may have been offered better salary and benefits, a bigger challenge — or they just weren't happy with your organization.
If your employees are leaving without a new role in place, that's a dire sign indeed. Quitting without securing a new job is a sign that they were so unhappy that they were willing to risk their financial stability to escape your organization. And we're all aware that a brief tenure looks questionable on a resume, so consider why your employees are risking having to answer questions about it to prospective employers.
3. negative online reviews
You should be conscientious about revisiting online job sites on an ongoing basis to ensure that you're staying up to date on the latest round of reviews and feedback that employees have recorded about your company.
Why is this so important?
First, one in three job seekers said they rejected an offer after reading a bad online review about the company. Clearly, then, those reviews are going to have a significant sway as to whether candidates decide to accept your offer — or whether they even interview with your company in the first place.
Beyond that, negative online reviews can exert a powerfully negative impact on your overall brand, too. So you'll need to read these reviews carefully. And don't just read reviews — look for information that can be used to establish common threads, like workplace disorganization, employees feeling unchallenged or salary levels that aren't competitive. From there, you should be ready to take action.
These may not be easy fixes, but with the cost of replacing an employee being 1.5 to two times their annual salary, you want your employee retention rates to stay as high as possible.
4. your top performers are leaving
Ordinarily, it would be reasonable to assume top-performing employees are the easiest to retain, right? Think about it: They're engaged, aligned with goals and consistently deliver great work. However, for companies where employee retention has become an entrenched organizational challenge, it's time to think again.
That's one of the reasons that conducting exit interviews can be so valuable. They're your chance to finally get the scoop on why employees are deciding to jump ship. So be sure to ask your departing stars not only why they're leaving, but also what you could have done to retain them.
Next, make a checklist in which you summarize where — and in what ways, precisely — your company is falling short. Here are a few key questions for you to consider.
- Is there a clear path for advancement for everyone in your organization?
- Is performance being adequately rewarded — and does it reflect differences between high- and low-performing employees?
- Do employees feel valued by your company?
Remember that, at the end of the day, loyalty goes both ways. Demonstrating to your employees that you value and trust them is critical to building an engaged, loyal workforce — and improving your employee retention strategy.
If even one of the telltale signs we discussed — high employee turnover rate, shrinking employee tenure, negative online reviews, top performers leaving — is in evidence at your company right now, alarm bells should be going off. The good news, fortunately, is that it's probably not too late: You can make changes today that will allow you to more effectively retain employees going forward. But you have to act fast.
In the next article in our employee retention series, we'll explore these changes in greater detail, beginning with a discussion of some of the ways retention can be tied back to ROI and bottom-line value. Mastering this information should help you make the business case internally in support of strategic initiatives specifically addressing employee retention rates.