Why Employee Retention Initiatives are More Important Than Ever
Employee retention is a hot topic in business right now. With the UK’s employment figures at their highest since comparable records began in 1971, employers are having to work increasingly hard to hang on to their best staff. Add in the fact that Brexit is looming and global competition is fierce, and it is easy to see how employee retention is now more important than ever before.
Here are 4 good reasons why businesses should be working hard on employee retention initiatives:
The UK labor market is retracting as a direct result of Brexit. Migration from the EU to the UK is at its lowest for four years. There is little doubt that the reduction in the number of non-UK EU nationals will continue as the Brexit process continues.
While there has been a coinciding increase in the number of non-EU nationals coming to the UK for the last 12 months, the Government plans to cut overall net migration to the tens of thousands means non-EU workers are unlikely to fill the gap.
Understandably, Brexit is a concern for businesses, especially those in the industries where employment of EU nationals is high, such as hospitality and farming. Employee retention (particularly of UK nationals) is one area businesses can work on in a bid to maintain performance and productivity. If employees leave in droves, it is not only disruptive to the business, it also has a crushing effect on the morale of the staff left behind trying to cope with the exodus.
There is already evidence that Brexit is impacting on staff retention strategies. The Resourcing and talent planning survey carried out by the Chartered Institute of Personnel Development (CIPD) in conjunction with recruitment company Hays, revealed that organizations are placing greater emphasis on developing and retaining existing staff in light of Brexit.
Introducing the right benefits and opportunities in the workplace is just one strategy employers should be embracing if they want to survive the Brexit staffing crisis.
Company culture and productivity
It’s not just Brexit that is causing businesses to up their game when it comes to retaining staff. There are other factors forcing UK businesses to push employee retention up the agenda. Positive company culture is proving to be an increasingly valuable asset when it comes to productivity. Employee engagement and retention is a big part of that.
Attracting and retaining skilled employees is fundamental to business success. A large part of that now comes down to company culture. Employees are a company’s greatest asset and high employee turnover can have a hugely negative impact on an organization’s performance. Employee retention is critical.
In the past, Millennials (those born between 1981 and 1996) have been known for their propensity to job-hop. But, commitment is a two-way street. Millennials do actually care about who they work for. They are just as capable of showing loyalty to employers as any other generation before them. However, unlike the generations before, they are more likely to take risks and engage with new employment opportunities.
In fact, Millennials are now getting increasingly picky about who they work for. According to Deloitte’s 2018 Millennial Survey, the Millennial generation is feeling increasingly uneasy about the future. Decent pay, flexibility and positive company cultures are most likely to attract Millennials and Generation Z (those born between the late 1990s and the mid-2000s).
Millennials feel companies should be doing more to make a positive impact on society and the environment. But, in the survey by Deloitte, it was found that only a minority of Millennials believe that corporations behave ethically. The survey also found that businesses’ actions strongly influence the length of time that Millennials stay with employers.
Given that Millennials comprise an increasingly powerful proportion of the UK talent pool, business leaders need to commit to building a strong company culture with social responsibility firmly on the agenda.
We need to remember that Millennials are also customers. They want to buy products and services from socially responsible companies who value their employees and the world around them. Businesses who put profit above these ideals will eventually suffer.
The cost of hiring and training employees is considerable. According to businessadvice.co.uk the departure of a member of staff could cost small business owners a quarter of that worker’s salary, with a potential £6,335 lost from a single resignation.
As well as recruitment costs, there is the issue of dropped productivity by employees during their notice period. There is also the issue of other employees evaluating their own happiness when a close colleague decides to leave. To prevent staff leaving, businesses need to invest in effective employee retention initiatives.
In a post-Brexit, Millennial world, UK businesses need to retain talent if they want to flourish.
About the author: Mike James is an experienced business writer specializing in HR, tech, and cybersecurity. On the latter, he has contributed to many of the leading publications both online and in print – such as StaySafeOnline, GlobalSign, Tech London and more.