Few would argue that we live in a dynamic world. That world is increasingly defined by disruptive, in many cases completely unforeseen, change. And one of the very real consequences associated with this pervasive change is employee attrition.
In the spirit of that reality, this article will examine employee retention. Employees across industries have become far more comfortable “moving on.” And in so doing, causing disruptions of their own!
Why are those employees leaving, and what strategies can employers consider to keep them right where they are?
Why Is Employee Retention Important?
The target of any effective employee retention initiative is top talent. That may seem like a blinding flash of the obvious, but it is sometimes lost in the mix because the attrition reported by the Bureau of Labor Statistics is done so in aggregate. Organizations remain viable when they can figure out a way to convince top talent that staying is a more attractive option than leaving. That is no easy task given that proven performers are the clear focus of competitive recruiting efforts.
When you lose a proven performer, at a minimum you lose time—the time it will take someone else to develop the experience necessary to fill the gap created by the departure. There are also a number of other reasons why it is important to retain proven performers:
- Onboarding and Training Costs: Money and resources your organization can put elsewhere
- Engagement and Efficiency: When a team enjoys who they work with and what they are doing, it is a cycle of ongoing reinforcement and continuous improvement
- Customer Service: More than anything else, customers value responsiveness. Tenured employees can fix problems quicker than those still learning
- Company Culture: When employees like where they work, what they do, and who they do it with, they typically stay where they are!
Why Do Employees Leave Their Jobs?
We have come to believe that employees don’t leave organizations, they leave their managers. In reality, they leave both. As you review the list of reasons for employee attrition below, think about which ones a supervisor could directly impact, and which are outside of that manager’s ability to effectively influence.
If an employee likes where they work and what they do, it is comparatively unlikely they would be attracted to a similar job that pays them less. As previously mentioned, most competitive recruiting strategies are grounded in creating dissonance with proven talent:
“You can work for us, doing pretty much the same thing you are doing now, and earn more money!”
Is this approach successful? Of course, it is! All other things being equal, employees with valuable skill sets will be compelled to pursue positions that provide them with compensation that tangibly recognizes that value.
Minimal Growth and Promotion Opportunities
Ability is defined as an employee’s knowledge, experience, and skill relative to a particular task. In Situational Leadership® terms, ability is determined by answering the following question:
“Is this person currently performing at a sustained and acceptable level?”
Conversely, an employee’s potential is focused upon a future state. Where might that employee be in six months, or five years, if they stayed with the organization? Organizations that effectively manage ability (in the short term) and establish a plan to fulfill potential (in the long term) have a better chance of retaining top talent.
Lack of Inspiration
People lose motivation for any number of reasons. Sometimes it has nothing to do with the job or the organization. Ever known somebody who was going through marital uncertainty? Or tending to a sick or injured child? Or coming to grips with anything that might fall under the umbrella of a “personal problem?” Those challenges can and do impact your willingness to perform.
Sometimes, it is far less complicated. Sometimes employees lose their drive when they have mastered their responsibilities and start to go through the motions. Sometimes they simply feel stuck, or bored, or trapped and want something different.
Most of us want to matter! We want to work for an organization with a noble purpose that is making a tangible contribution to help the world become a better place in some way.
Beyond that, we want to feel like our contribution, whatever it might be, is important as well. This is the essence of dignity in the workplace. All jobs are not created equally. But all jobs (and the employees doing them) need to be respected and recognized.
Can a bad boss make you sick? The short answer to that question is absolutely! If you report to a manager who:
- Takes credit when things go well
- Blames others when things don’t go well
- Is consistently negative
- Intentionally (or unintentionally) sets people up for failure
- Steals your ideas and presents them as his or her own
It can have a profound impact on your view of work in general, and (unfortunately) your self-image. The consequences of working for this kind of manager can have a deep impact on an employee’s decision to work someplace else.
A hands-on, directive style of leadership is a short-term approach that aligns with followers who don’t know what to do and are afraid of making a mistake that might reflect poorly on themselves or their team. This approach is intended to create movement and quickly gives way to more collaborative styles once that momentum has been established.
This same directive approach with a follower who knows what to do and enjoys doing it is often perceived as micromanagement and is a strong source of job dissatisfaction. Followers feel as if there is nothing they can do to earn the trust and receive the empowerment they deserve.
Little Structure or Feedback
In the same way that too much structure can create job-related dissatisfaction with employees who know what they are doing and enjoy doing it, little or no structure, in combination with little or no performance-related feedback, can be a primary source of dissatisfaction as well.
Employees in those circumstances feel abandoned, alone and hold out little hope of being able to work through their challenges unless they receive some semblance of guidance, assistance or direction. The approach of the manager needs to reflect the particulars of the situation and the follower.
Of course, there are reasons people leave organizations that have nothing to do with the organization or the people who work there. Assuming remote work is not an option to extend employment, an employee might move to be close to family or because their spouse starts employment in a faraway place.
Little to No Benefits
While competitive pay is a critical component of any retention strategy, it is truly only one aspect of overall compensation. Company benefit policies that answer questions like the following play a key role in attracting and retaining top talent:
- What happens if I get sick?
- What happens if someone in my family gets sick?
- What happens if we decide to have another child?
- How does your organization support my retirement?
The less an organization thoughtfully addresses these kinds of concerns, the higher the probability they will lose employees to organizations that do.
Inflexible Workplace Policies
Frederick Herzberg conducted a pioneering study on human motivation in the late 1950’s that remains relevant today. What became known as Herzberg’s Motivation-Hygiene theory concluded that the things that turn people on about work (i.e., mastery, autonomy, the opportunity to do meaningful work) are different than the things that turn people off about work (i.e., working conditions, a “bad boss,” restrictive policies).
Employees who perceive an organization’s “Hygiene Factors” to be inhibiting and/or inflexible are most assuredly retention risks.
Employees who have too much to do are flight risks. They wake up one day and realize they cannot continue to deliver at or above expectations with everything on their plate, and they look for a fresh start. Here are two reasons this can occur:
- Employees: They can’t say no! Beyond that, sometimes well-meaning employees volunteer for projects they simply do not have the experience or the bandwidth to complete
- Management: They consistently delegate high-visibility projects to team members with the most proven ability to deliver results, without removing other responsibilities from those employees
Everyone has a breaking point or a limit. When we reach or approach that juncture, we look elsewhere for employment.
Unclear Expectations or Guidance
Micromanagement has been identified previously as a reason employees leave organizations. It is! By the same token, when employees receive no guidance or support, especially on projects of significance, it can have a similar impact. Think of it in terms of what and how:
- What: Employees need to know the requirements and the timing of the deliverables. In the absence of this structure, what may well be intended as delegation is perceived as abdication, or worse yet, abandonment
- How: This is where employees, especially tenured employees with proven track records, can perceive micromanagement
In general terms, structure the what and, if possible, empower the how.
Poor Work-Life Balance
Each and every one of us has a life! And it is up to us and the organizations we work for to determine the balance of work within that life. This is a highly personalized endeavor and one that individual managers need to initiate and stay on top of with employees.
When employees feel they are but a cog in the wheels of organizational progress, they look for employers with a more holistic approach that makes them feel like they, and the lives they pursue outside of work, matter.
High-caliber high school athletes who are recruited to play for a number of different colleges routinely prioritize the comparative facilities and support structures of the schools they consider. In addition to the coach they will be playing for and the institution they will be representing, considerations including the weight room, training staff, academic support, etc. play a key role in their decision to enroll, compete, and follow their dreams.
It is much the same with high-caliber employees who have a desire to fulfill their potential and be as successful as they can possibly be at work. Those employees will forever be attracted to organizations that provide them with the resources and support to fulfill their aspirations.
Lack of Childcare Access
Most parents care much more about their kids than they do about their jobs. At a minimum, parents want their kids to be safe and well cared for when they are required to be away from them while at work.
Comparatively inadequate compensation and benefits were identified previously as reasons employees leave organizations. For parents, access to quality childcare is frequently at the top of that list. Some parents will work for less than standard compensation if an organization provides childcare that is perceived to be the best they could possibly get.
There was a time (not all that long ago!) when statistically, employees entered the workforce around 25 years of age. They worked until they were 65, retired, and passed when they were 68 to 70 years old. Outside of the age employees generally enter the workforce, none of that is relevant today!
Generally, people live a decade longer (or more), and many employees have the option of retiring a decade sooner (or more). As such, “work” is in active competition with “retirement” in the prime of many employees’ careers. With increasing regularity, organizations need to be able to provide those employees with compelling reasons to stay right where they are and continue contributing to the organization’s noble purpose!
How Leadership Teams Can Retain More Employees
Leaders are judged! And typically, that judgment is a function of their direct or indirect impact on three highly interdependent workplace dynamics:
- Productivity: Are goals achieved?
- Engagement: Are employees energized by that achievement?
- Retention: Does top talent stay with the company?
As it applies to turnover, consider that good leadership impacts retention through engagement in the following ways.
Offer More Benefits and Higher Pay
There is nothing that drives employee engagement like tangible recognition for the value provided. When the efforts of employees are tied directly to the achievement of outcomes through annual raises, bonuses, or increased benefits, the message is clear: “You matter, and we want you to stay!”
When employees know they will be treated fairly and can count on being included in the organizational success they help to orchestrate, it builds loyalty and decreases the probability of transition. This has proven to be the case even when competitive offers to transition promise “more.” At the end of the day, trust demonstrated over time through leadership does indeed make a difference!
Leadership is not something you do to people. It is something you do with them! In that regard, effective leaders foster an environment of transparency, authenticity and trust. In many cases, employees need to feel comfortable initiating performance discussions, especially when things are not on track or aligned with expectations.
At The Center for Leadership Studies, we help leaders both own and communicate their readiness to perform. That translates to focused discussions on challenges and obstacles that managers and employees work their way through.
Adjust Management Styles to Employee Needs
As evidenced previously, employees leave companies because they don’t get enough structure or guidance—or because that’s all they get no matter how proficient and motivated they are to consistently deliver results!
There is no “best style of leadership.” They all work—and they all don’t! It depends upon the situation, as defined by the task that needs completing, and the person responsible for that completion. Employees are much more likely to stay with companies when their direct supervisor gives them what they need (direction, collaboration, empowerment) when they need it.
Improve Your Leadership and Retain More Employees With the Situational Leadership® Model
The Center for Leadership Studies is the global home of the Situational Leadership® Model. This model has been helping leaders around the world and across industries effectively influence others for over 50 years. It has always been a “follower-driven model.” And we wholeheartedly believe that is the primary reason the Situational Leadership® process is more relevant today than ever before!
In keeping with this article, we have designed our flagship offerings (Situational Leadership® Essentials and Situational Performance Ownership™) to provide leaders at all levels with an understanding of how their style or approach to influence can have a profound effect on both employee engagement and retention.
Effective leadership is a function of managers and employees forming a relationship around the work to be done. The stronger that relationship, the less likely employees will be to pursue opportunities elsewhere.