A quarter of Joblist survey respondents quit their jobs in 2022, with 35% leaving without another job lined up.
What made the employees leave these companies in such a hurry? Maybe poor employee engagement? Inefficient employee recognition? No proper employee well-being strategy? Maybe all of them.
Do not let the lack of a proper employee well-being perspective or a decent company culture be the cause of employee turnover for your company. Let us discover the critical factors influencing employee turnover and how to master them.
When you look at the employee turnover data closely enough, you will start to see patterns that weren't there before. It is an interesting thing to do because it tells us a lot about the way industries manage their employees and culture. We can even say which job role has more turnover in the same industry.
Below is the list of industries that have the lowest employee turnover rates:
- Manufacturing (9.3%)
- Real Estate (9.3%)
- Transportation (9.3%)
- Construction (9.2%)
- Government Administration (8.4%)
Now, let us look at the list of industries that have the highest employee turnover rates:
- Professional services (13.4%)
- Technology and Media (12.9%)
- Accommodation (11.8%)
- Entertainment (11.8%)
- Retail (11.4%)
So what is the first half doing right that the second half has not yet figured out? The number one factor that influences the decision of employees to stay in a company is the way they are treated and the kind of culture the company upholds.
So, if you want to lower your turnover rates and increase employee retention, you should look in the right direction.
A company that emphasizes well-being and empowers them while helping the company achieve its goals is said to have mastered the people and culture strategy. A good culture paves the way for developing values, such as making employees feel united and purposeful, which can boost engagement and productivity.
Since employees are drawn to firms that share their values, it can also help recruit and retain outstanding personnel. A strong culture also builds consumer, stakeholder, and community trust.
Strategy is equally important. A culture without strategy takes out the competitive edge of companies. A clear and successful strategy gives businesses direction and focus. It helps an organization allocate its resources to achieve its goals and adapt to external changes. A solid strategy also boosts competitiveness and long-term success.
If you are looking for a foolproof way to ensure your employees do not churn, start by looking at your company culture and people strategy. Here's why should do so.
1. You can see a dip in employee turnover
LinkedIn says industries offering professional services have seen the most significant turnover rates globally.
It is a whopping 13.4%. Is it because the professional service industry has the highest stakes? Maybe. But let's look at the solution for once rather than gape at the size of the problem.
We know that employee turnover is a huge issue. But how can we bring this down? Start from the roots. And when it comes to an organization, roots mean its people and culture.
If your organization is people-oriented and has a value-oriented culture, chances are that employees will stick with you for a long time. A company that focuses only on outputs might be sacrificing its biggest resources (its people) as a means to get better results. Once you begin putting effort into planning things around your employees and building a culture that takes into account employee welfare, you will notice employee turnover drop.
2. No more talent gaps
One of the problems that arises in companies that do not give emphasis to the learning and development aspect of their employees is that they sooner or later find a bunch of employees with tremendous talent gaps. It might be because of the inability of the company to provide employees with relevant industry training at regular intervals of time.
A company that is people-oriented and has a good culture strategy thinks things from the perspective of employees. It helps them identify stages where it's time to upskill employees or invest in their learning.
This, in turn, makes sure that the current employees have all the necessary talent and skill set to tackle the latest advancements in the industry. If the company did not invest in a good people and culture strategy, they might suddenly find themselves with employees lacking the latest skills. So make sure to invest in your present employees rather than spend effort in trying to find new ones with skills.
3. Increases employee engagement and satisfaction
One of the biggest markers of an organization that focuses on its people is that its employee engagement is always off the charts. When every policy and regulation in a company is a direct reflection of employee well-being, then there is no way an employee can be anything but happy!
A positive work culture is the number one factor influencing the engagement and satisfaction level of employees. Even when compensation is low, employees tend to choose companies that have a better work culture: companies that put employee wellbeing before everything else. So, if you are looking for a way to revive the pulse of employees in your company, start with a people and culture strategy.
4. Align employees with the core values of the company
Have you ever wondered what happens to a company where the employee goals and company goals move in the opposite direction?
Look no further than companies struggling to retain employees for more than a year, and the answer becomes apparent. How many companies take the time and effort to help their employees understand their core values and help them reflect the same in everyday operations?
Very few. Suppose an organization gives importance to its people and curates a value-oriented culture (a culture that focuses on core company values). In that case, it will have no problem aligning the employees with the core values of the company. It will create a sense of harmony and purpose for the employees.
Look no further than companies struggling to retain employees for more than a year, and the answer becomes apparent. Only a limited number of organizations invest the time and effort to guide their employees in comprehending the core values and integrating them into their daily activities.
5. Helps identify your star performers
The more time you spend observing your employees, the better insights you will get. There are some tell-tale signs of employees that have a promising future. It might be anything ranging from a good work ethic to the ability to manage their work without much supervision.
A company with a solid people and culture strategy in place makes it a priority to find such patterns in their employees. What this achieves is identifying star performers. If you need to find something, you have to intentionally look for it, right? Once you find cush employees, your company can plan a leadership development framework for such employees and in the future, incorporate them in succession planning as well.
For instance, ThriveSparrow provides insights into the top performers within your organization. You have the flexibility to customize notifications, displaying the leaderboard on your preferred communication channel, such as Slack, either on a monthly or quarterly basis. This information can be invaluable when making decisions about potential new leadership roles within your company.
6. Gives your employees a sense of direction
A purpose, a good one, imbibes a sense of duty and productivity among employees. If an employee knows that the everyday work they do helps make the industry a better place in the long run, they will be inclined to work more effectively.
This is exactly what a people and culture strategy does. A culture that roots itself on company values takes time to help the employees see the bigger picture. It eventually helps employees have a sense of meaning and direction to their work, increasing the quality of output.
7. You can easily attract the right talent and keep them
Now comes the most important point of all. A company that takes care of its employees and has a positive work environment builds a good reputation for itself sooner or later. The reflection of the same can be seen in company review sites like Glassdoor and Google.
What this does is attract the right kind of talent that aligns with the outlook and culture of the company. What is even more interesting is that such a company would not have to worry about the increasing employee turnover rates inflicting their industry.
If you are a company that focuses on the well-being of your employees along with achieving company goals, then you need not worry about employees leaving your company any time soon.
Most people don't think of human resources when they think of strategy. Maybe this is why companies are seeing an all-time increase in employee turnover rates across industries.
We have seen the importance of valuing employees while curating company strategy for increased performance.
This is where the HR scorecard comes into play.
In simple terms, it's a systematic approach that pinpoints the essential elements, including results, habits, skills, mindset, and attitudes, necessary for a successful workforce.
It not only measures these factors but also illustrates how each one influences the company's overall performance. Essentially, it bridges the gap between people, strategy, and performance. To effectively implement an HR scorecard, follow these four steps:
- Identify the HR Deliverables
- Developing a High-Performance Work System
- Analyze HR System Alignment
- Put in Place HR Efficiency Measures
Strategic People Management and Lower Employee Turnover Rates
People are your most valuable assets. Investing in their development can yield long-term benefits. To embark on this journey, consider conducting an in-depth employee feedback survey, with an employee success platform like ThriveSparrow.
Let us analyze the results and collaborate on the right people management strategy. Together, we can build a company culture that aligns with your values and prioritizes employee welfare. If you seek ways to retain your employees, follow up with your employees frequently.