An employee retention strategy is one of those things you don’t realize you need until you REALLY need it. Like when some of your best employees have left with little more than the standard two-week notice for other jobs they were clearly interviewing for while working for you. Now you have to figure out how to cover their workload while going through the whole process of finding, hiring, and training new hires to fill those vacancies.
Once all that is squared away, it will hit home that it’s better to work at keeping your top talent than finding people to replace them, and you’ll want to get your employee retention strategies working to keep your top talent happily working away for you.
Employee Retention Strategies for High Turnover Industries
You can’t run a business without employees, and as turnover rates rise, retaining employees becomes a crucial component of sustainable success. Whether you’re running a small business or a large corporation, talented employees are your greatest asset.
Why You Need Employee Retention Strategies
Developing employee retention strategies that decrease turnover is a high priority for businesses who know the true cost of a job vacancy. Hiring can be expensive and time-consuming, and if you don’t get it right the first time, it’s an even bigger drain on company resources.
Additionally, every day a position remains empty, there is work that still needs to be done or reassigned which puts a strain on your other employees while productivity levels and employee morale drop. These are warning signs that employee retention will get even harder because when your employees see good people leaving, they begin to wonder if they should look at leaving as well.
Industries With The Highest Turnover Rates
Based on analysis of LinkedIn’s database of half-a-billion professionals, the turnover rate across all industries in 10.9%. The industries with the highest turnover rates over the last few years are:
Some sectors in the technology industry have turnover rates higher than average, which is largely driven by the increasing demand for technically skilled workers and competitive recruiting packages.
It’s not surprising that it is hardest to hold on to talent in the technology industry with an ever-increasing demand to fill a rapidly growing market. While “technology” is a broad term, a detailed look at LinkedIn’s data shows three specific occupations as having the highest turnover:
1. User Experience and Designer at 23.3%
2. Data Analyst at 21.7%
3. Embedded Software Engineer at 21.7%
These numbers mean the IT industry is seeing double the national average of employee turnover and suffering more than most industries from the inability to retain employees.
“There’s good evidence to suggest that the trouble with retaining tech talent is high-demand and rising compensation within the industry: as employers and offers get more competitive, top talent is more eager to jump on new opportunities. The numbers support this theory: according to LinkedIn data, almost half (49%) of departing tech employees take another job within the tech sector,” states Michael Booz, Insights Program Manager at LinkedIn.
Employee Retention Strategies
Hiring the best employees is just the start; you also need to retain them. To lower your turnover rate, you need to understand what employees want. The best way to get that information is to ask them. Communication with your employees is crucial, both in the information you share and the information you receive.
Survey your employees with anonymous polls regularly to collect insight unique to your company that will increase employee retention to understand what needs improvement. When you know what issues are raising your turnover rate, you can prioritize your employee retention strategies to match the greatest areas of need.
1. Improve the hiring process
When you have the right person in the right job, they are more likely to stay with your company. To hire the right person, you need a well-defined interview process that assesses whether a candidate possesses not only the technical skills required but also the interpersonal skills that align with your company values. Delight employees from the start with an onboarding process that teaches them about the job, the company culture, and how they can contribute. Let new hires know how they can thrive and address any issues that come up.
ALSO READ: Interview Skills for IT Introverts
2. Implement leadership development programs
The inability to retain qualified candidates who successfully made it through your interview process has to fall under someone’s responsibility, and it is managers who are held accountable. You’ll find that people are more likely to talk about how they can’t stand their manager or supervisor than how they can’t work for a company as a whole. Teaching your leaders and managers how to communicate effectively and build relationships within and with their teams creates an inclusive culture that people want to stay a part of.
3. Find out how employees feel at regular intervals
Create a culture that encourages, and even rewards employees for their feedback and participation in opportunities to share their ideas. Conduct an anonymous survey of your entire staff at least twice a year. Ask some open-ended questions that encourage employees to give detailed answers about their experience. This is also a chance to increase organizational transparency by sharing results and developing a plan that addresses pain points when possible.
Some of your most useful input will come from periodic one-on-one interviews with performers from every level of your company. You’ll uncover why they perform so well while gaining insight on what they would improve to make the work environment better for everyone. An added benefit to consistently approaching your employees for feedback is they are more likely to feel heard and seen and included in the process of making improvements.
4. Conduct exit interviews
I can give you all kinds of numbers for turnover rates in your industry, in your market, but blind guessing at why people are leaving your company in particular isn’t going to give you the information you need to build an employee retention plan. Exit interviews are the most effective way to get honest information on what needs to change in your company.
The quickest and easiest way to find out why people are leaving is to ask the people who are leaving. You can do this in person, by email, or through a confidential survey, but in some way make this an official part of the off-boarding process. You’ll get the most honest answers when people don’t feel their job is at risk. Just be ready to hear the truth, because knowing exactly where problems lie is the only way to design an effective solution.
5. Have actionable career discussions with employees
When you are aware of what your employees want, you can put them on track to accomplish their goals. The 2018 Workplace Learning Report found that 94% of employees say they’d stay longer if a company invested in their career. Find the best way to provide resources and tools for that develop the skills your employees need to advance their careers and encourage internal mobility both upward and laterally to align with the goals of both the employee and the company. When your workforce sees you hiring within, they are more likely to feel that there will always be a place for them with your company.
6. Remain competitive with compensation
Some employees will decide to leave a job based solely on salary, but if you remain competitive in your market for compensation packages, you’ll eliminate one of the top four reasons people bail. It’s absolutely critical in this competitive labor market for companies to offer attractive compensation packages. That includes salaries, bonuses, paid time off, health benefits, retirement plans the other perks that make working for your company the best option. Ensure every employee has a full understanding of all the benefits they receive from your organization during onboarding.
Why Exit Interviews and Communication are Crucial for Developing Employee Retention Strategies
Employers, managers, VP’s, you name it… they HAVE to stay 5, 6, 7 steps ahead in the Technology field where turnover is highest when they lose a key contributor. Hammer that exit interview hard and don’t be afraid to hear things back that are going to make you feel uncomfortable.
Communicate honestly and openly with your employees after exit interviews and be transparent about why that person left. Sometimes some circumstances cause people to change jobs that have nothing to do with their working environment or employee satisfaction, and if that is the case, it’s beneficial to let the team know.
On the flip side, if a person has left for a reason that could be a concern to other employees, it is wise to get that out in the open and demonstrate to your employees that you are aware of and addressing those concerns. Get in front of the issues so when other people have that “Should I bail too?” moment they are hearing positive communication and feel that something is being done about whatever the concern is.
Exit interviews for key contributors in your company are non-negotiable. The loss of essential personnel has a greater effect on morale and can cause a ripple effect of wide-spread insecurity when people vacate highly visible positions. When a key contributor leaves, and it is a mystery as to why you leave the door open for all types of assumptions that can lead to further retention issues down the road.
Transparency is vital these days! Be vulnerable with your employees; let them know that sometimes the boss screws up too. You communicate and they are going to respect you a lot more in the long run.
Start Your Employee Retention Efforts by Understanding Why People Leave
Get in the mind frame of an employee and think about what you’d need to have to be satisfied in this position, at this company, at this time. Step into different shoes to get a view of how your company culture, benefits, and management style align or conflict with the career priorities of your employees. Getting your information directly from the source gives a better idea of where the disconnects are between satisfied and loyal employees and the people choosing to leave your company voluntarily.
As a jump off point for looking at ways your business could begin to address employee retention, let’s look at a 2015 survey that asked 10,000 professionals who recently changed jobs why they left. Almost half (45%) of those asked picked “lack of opportunities for advancement,” and 41% said “unsatisfied with the leadership of senior management” contributed to them leaving. The other biggest reasons people left included being unhappy with the work environment (36%), a desire for more challenging work (36%) and unsatisfied with the compensation/benefits (36).
Every organization is different, so to assess and understand your unique turnover and retention influencers, it is absolutely essential to look at your own data from feedback, surveys, and exit interviews.
Chip Murphy is a co-founder of CDM Technology and has over 19 years in the IT consulting, contracting, and professional search service space.
CDM Technology is a customer-focused, premier provider of consulting, contracting and recruiting solutions for the IT, Digital Marketing, and Project Management markets. Each company’s hiring situations is unique – that’s why our use of personalized hiring solutions and a team-based approach take advantage of opportunities that your competitors can’t. With over 30 years combined experience in the San Diego IT market and a broad network of top clients and candidates, when you tell us what you need, we put the right type of resource in front of you.