Are you losing employees? You're not alone.
Employee turnover is on the rise, with the tech industry experiencing a turnover rate as high as 13.2 percent. Meanwhile, nationwide unemployment is very low -- just 3.9 percent in April. That's the lowest U.S. unemployment rate since 2000, and it's a sign that the pool of quality candidates is dwindling for employers. With these two factors combined, hiring and retaining quality team members is tougher than ever.
Of course, turnover isn't limited just to U.S. tech companies. It's a worldwide issue, one that all companies need to attend to. For example, a Willis Towers Watson report found that only 45 percent of workers were committed to staying at their present positions for another two years. That's not surprising when you consider that only 42 percent of workers think their company does what it should to retain high-performing employees.
This failure to prioritize retention is anti-strategic. First, it's a direct waste of money, because training new hires is expensive. An analysis of 27 case studies found that, for almost all positions, the average cost of turnover was equivalent to 21 percent of an employee's salary. But high turnover is also a canary in the coal mine for businesses because when employees are not satisfied enough to stay at their jobs, they are less likely to be giving their all in those jobs. In fact, Gallup estimates an unbelievable $7 trillion dollars in lost productivity results from the 85 percent of workers who report being disengaged at work.
Experienced, knowledgeable employees are your company's most valuable asset and something you can't afford to lose. Given that reality, savvy companies are looking at ways to reduce turnover any way they can. Below are a few simple and effective ways to reduce churn and hold on to the best members of your team.
1. Open up remote work -- and build your culture around it.
One of the most effective ways to improve employees' satisfaction is to allow flexibility in how they get their work done.
Take remote working. A generation ago, it was rarely possible. Now, whole businesses are built on it. One of them is Clevertech, a New York City-based software development firm with an entirely remote workforce. Its employees report loving this arrangement, which allows them to reduce commuting, live anywhere in the world, and structure their days in a way that best suits their working style.
Having a satisfied remote workforce requires actively reinforcing connections through culture, a truth not lost on Clevertech founder Kuty Shalev. "Remote teammates inherently experience less physical interaction with co-workers," he stated. "Because strong collaboration is so essential for a virtual workforce, you need to promote a 'tribal' mentality." That's a wise approach, as studies show even working alongside a good friend can increase job satisfaction by 50 percent.
2. Include employees in valuable, future-focused conversations.
Work flexibility isn't just about convenience. It's also about having at least some control over one's work.
In the same way, being included in conversations about the direction of their companies provides employees with a sense of control over their work situation, even if they are not in charge. Giving employees a voice is an important feature of great jobs.
This truth is underscored by research compiled by executive search firm Acertitude on employee satisfaction and how it connects to communication and inclusion. For example, 77 percent of employees feel most engaged when there is open communication, opportunities for input, and connections between current changes and the company's future.
Acertitude encourages its clients to embrace this future-focused approach to employee management when evaluating candidates. "We step back and look at not only where our client is, but also where they are going," said Acertitude Founder Kevin O'Neill. "We aim to match the trajectory of the candidate to the trajectory of the company, so the company won't outgrow the candidate and the candidate won't outgrow the company."
3. Treat employees well -- and not only in terms of compensation.
Considering the statistics regarding employee satisfaction, this may seem like stating the obvious. But it's worth breaking down how to do it right.
Treating employees well is often wrapped up with compensation and benefits. It's always a challenge to strike the right balance between keeping costs down and providing employees attractive compensation, but make sure you are not erring on the side of underpaying your people. To ensure you are compensating your team members appropriately, schedule times to review employee salary and benefits packages and stay informed on what other companies in your market are paying for the same roles.
But treating employees well means more than just paying them well. A supportive social environment is critical to employee satisfaction. In fact, Boston Consulting Group found that being valued for our work may matter more than anything. "Globally, the most important single job element for all people is an appreciation for their work," the survey authors concluded. So, make a point to increase supportive interactions with your employees -- and encourage other team members to do the same.
By making these simple tactics a conscious part of your leadership vision, you can increase employee satisfaction and retention. You'll not only be saving money, but you'll be working alongside happier people, too.