2014 dawned with reports that employee turnover would reach critical mass during this year. Salary.com’s annual “January Job Hunters” survey claimed that employees were in many ways more satisfied with their jobs than in years past, but a whopping 83 percent of the people surveyed said they planned to look for a new job during 2014. Management consulting firm Hay Group released research at the end of last year predicting that the global employee turnover rate would see a steep increase in 2014.
Halfway through the year, figures show more people are quitting than are being laid off or otherwise discharged, but the unemployed still outnumber open jobs. Figures from the U.S. Bureau of Labor Statistics show that in June 2009—when the latest economic recession technically ended—there were 6.2 unemployed persons per job opening. In March 2014, the number of unemployed persons per job opening stood at 2.6.
What can employers do?
Regardless of whether turnover worsens, employers are smart to focus on retention. CareerOneStop Business Center, sponsored by the U.S. Department of Labor, includes suggestions on its website for retaining top employees, including:
- Provide employees development opportunities and regular feedback.
- Allow flexible work schedules to help employees achieve work-life balance.
- Let employees contribute directly and be recognized for their efforts.
- Provide good pay and opportunities for raises along with benefits tailored to employees’ needs.
- Spend time and effort on recruitment and hiring.
- Develop solid orientation and onboarding practices.
- Put effort into performance evaluation so that employees know what they’re doing well and where they need to improve.
- Develop effective communication policies so that employees understand how the organization is doing and how their efforts can help.
Rewarding high-performing employees is another way to boost retention. Consulting firm Accelir surveyed human resource professionals and corporate leaders in the summer of 2013 and published a paper titled “Rewards and Recognition: 2014 Trends Report.” The study notes that developing a rewards and recognition program can be effective without being expensive.
“Half (57%) of the organizations we surveyed had spent less than 0.5 percent of total payroll on rewards and recognition programs. … While some rewards, like selectable gifts, come with a price tag, other popular means of recognition, such as emails from senior executives and e-cards from co-workers, are essentially cost neutral,” the report states.
The Accelir report highlights three trends in reward and recognition programs:
- Early service awards. The research shows that employers are moving toward early recognition instead of the traditional awards for five, 10, and 20 years of service. The report cites government statistics showing that job tenure in the United States is less than five years. Other research has shown that most Millennial workers expect to stay at a job no more than three years.
- Recognition culture. To develop a culture of recognition, the report says all levels of employees, not just HR, need to be on board. “The company needs to ensure that employees are recognized on an ongoing basis for exhibiting a commitment to a variety of factors—often tied to a company’s core values,” the report states. Most of the survey respondents consider performance-based awards more important than service-based awards alone.
“This concept is different from a traditional annual performance review because it is focused on identifying the successes or victories on a regular basis—not necessarily the development or challenge areas an employee may be facing,” the report states.
- Role of social media. The report notes that more than 82 percent of companies aren’t including social media in their rewards and recognition programs, and 55 percent don’t want social media included in their programs. The report calls that finding surprising because social media has become an important component in talent acquisition. The report doesn’t suggest how to use social media in rewards and recognition programs, but it predicts it will be another three years before social media will be commonly integrated in programs.
Why the concern over retention
The Hay Group’s research indicates a global threat to retention, with the turnover “spike” hitting the United States this year. The study identifies five factors to boost retention:
- Employees need to have confidence in the organization and leadership.
- Employees want to know they have opportunities for growth.
- Employees need to feel valued and rewarded for the contributions they make.
- Employers should develop an environment for success by “placing the right people in the right roles, creating efficient work processes, enabling collaboration and providing a supportive working environment,” the report states.
- Employers need to provide employees with authority and the ability to influence how work is done.
The report urges immediate action. “Make no mistake: We are in the eye of a turnover storm. You must give serious thought to what drives employee commitment, and where you need to prioritize to protect retention as job markets recover.”