The concept of 'retention,' according to the Oxford Dictionary, refers to the act of preserving or maintaining something rather than losing or discontinuing it. In the context of employees, retention involves intentional efforts by an organisation to foster an engaging environment that encourages long-term commitment. This notion of employee retention aligns with Dave Ulrich's definition of intellectual capital, where he equates it to "competence multiplied by commitment."
In simpler terms, intellectual capital represents the collective knowledge, skills, and qualities of individuals within an organisation, multiplied by their dedication to putting forth their best efforts. This underscores the importance of acknowledging the commitment of employees to the organisation, as well as the organisation's responsibility to create an environment that encourages their willingness to remain.
Building an employee retention culture requires a long-term strategy that an organisation should implement to attract prospective candidates, hiring and onboarding them in an appropriate role, aligning their role with the organisational objectives, and equip them by supporting and developing them to achieve this purpose. The employees need clarity of purpose and direction so that they are strategically aligned with the organisation and its objectives.
Retention of employees largely depends on understanding what drives employee experience. Apart from the common factors like lack of compensation, benefits, and growth which result in attrition, there are other aspects that employees value that help them build their career in an organisation. These factors cater to the intrinsic needs of employees which reflects the organisational culture that defines and shapes their work environment. A post-pandemic research by McKinsey identified that the perception that their work was not being valued by the organisation and a lack of sense of belonging were the primary reasons for employee attrition. Some of these findings have implications which can help in tweaking your talent-management strategies for 2023 and beyond.
Let us look at a few of the relevant ones.
Employees want to work in an environment that is respectful, inclusive, and productive where they feel appreciated and valued for their contributions. Some of the factors that they look forward to are:
Creating a sense of purpose in their work
An average employee spends more than one-third of their day at the workplace. Global research among employees by McKinsey reveals that around 70% of employees believe that their sense of purpose is defined by their work. Ironically, most of organisations do not really invest in helping the employees identify and align this purpose with that of the organisation where they spend more than 50 % of their waking hours.
It is inherent nature for people to feel a sense of satisfaction when they can contribute some value to their eco-system. The leadership should engage the employees by explaining the purpose of the organisation and its contribution to the society. This purpose when aligned with their personal contribution towards achieving that purpose, will provide them with a sense of purpose in their lives. For example, showing an IT employee how the software product/services that they create impacts the lives of their end customers will give them a sense of satisfaction which is beyond what their paychecks can provide. Organisations whose employees feel that their personal purpose aligns with that of the organisation are more likely to stay engaged with their work and maximise their potential.
Flexibility is the key
It is basic nature for employees to feel greater ownership and accountability over anything that they create or control. This could even be applicable to any policies that the organisation implements including common ones like compensation and benefits. Employees look forward to fairness and equity apart from the reasoning behind the existence of that policy/guidelines. For example, employees want to be treated and rewarded in a fair and equitable manner regardless of age, gender, ethnicity, disability, sexual orientation, geographic location, or other similarly defined categories. With increased effort and higher performances employees also expect to be rewarded more significantly than counterparts who provide output at or below the norm. Employees can be a part of the decision-making process on what and how the rewards and recognition framework should look like.
The same goes for flexibility and work-life balance policies. While a hybrid work model may help in creating a work-life balance it will not necessarily serve the purpose if they are expected to complete more work than what is achievable to make up for the travel time that they save by doing so. Flexibility in policies should be purpose-driven and achieved through a sense of ownership and not by mandates alone. For example, the managers can collaboratively discuss and agree with the employees on what minimum degree of in-person collaboration the business would need to achieve the best results. This could serve as the basis for your hybrid model of work.
However, flexibility should not only be restricted to these areas– it can also open new avenues to employees in their work front by allowing them to explore different roles. Consider, for instance, an engineer being given the opportunity to try his/her hand at social media marketing, or an HR manager getting an opportunity to explore project management. Such cross-functional secondments enable employees to temporarily immerse themselves in a different area of the business while still retaining their core jobs.
The millennials and Gen-Z which will soon form a majority of the workforce do not believe in a one-size fits all model and looks forward to such flexibility in all areas of work. This sort of flexibility will help bring in that sense of solidarity and sense of belonging which will give the impetus required for creating a culture of retention.
Investing in professional development
Professional Development is gaining new skills through continuing education and career training after joining the organisation. Ongoing professional development can help employees in improving their skills on a continuous basis, which in turn can improve performance and enhance productivity. It clearly outlines the intent of the organisation to invest in the growth and career advancement of the employee while it also reflects the commitment of the employees who have invested in it.
This makes an employee feel valued and inculcate in them a sense of belonging. The LinkedIn Workplace Learning Report, 2023 has outlined “Mapping learning opportunities to business goals” as their number one priority and are focusing on upskilling and creating a culture of learning to help improve employee retention.
Larry Page the co-founder of Google sums it up beautifully when he says, “Make sure that everybody in the company has great opportunities, has meaningful impact and is contributing to the good of the society”. This when put to practice could be the recipe for success to create a culture of retention for the future.