It's a new year and the economy is finally on the upswing, meaning employees are more likely to be on a solid financial footing, ready to stay with their employers for the long haul. Well, that's what many HR leaders and C-suite members would like to believe.
The truth, however, is that employees may be ready to look for greener pastures in the coming year. It's a sobering lesson for business leaders, as we often equate economic growth with stability. However, when a solid economy is abuzz, employees are quick to recognize that many industries will expand, and with that growth comes bigger, better and more lucrative jobs.
So just because your entry-level employee is engaged, don't expect that to translate to loyalty when a rival recruits him or her to an advanced position.
This is a major concern for staffing and HR professionals. In fact, it's their biggest concern. A recent Harris Poll survey for CareerBuilder found that 32 percent of companies believe retaining talent will be their top challenge in 2014. That was the top response cited by survey respondents.
Despite some economic growth in recent years, companies are still struggling to put enough aside to invest in employee engagement and retention programs.
"Many companies are still struggling to regain footing that was lost during the recession," said Rosemary Haefner, vice president of human resources at CareerBuilder. "Only 28 percent of employers reported that their business has returned to normal or is better than it was before 2007. Retention and productivity issues are top of mind as companies deal with constricting budgets, reorgs and long vacancies, and look to engage with current and potential employees in a more meaningful way."
When turnover is high, organizations are forced to spend excessive amounts of money on recruitment and onboarding to fill vacant positions. More importantly, turnover can have a domino effect, according to Bob Corlett of The Business Journals. Once your top departmental manager leaves, his or her assistant might follow them out the door, leaving teams in dire need of leadership and experience.
Despite the still tenuous state of finances at many companies, creating quality engagement strategies doesn't necessarily mean breaking the bank. Although companies will definitely need to invest time and money into the process, doing so could actually help companies save money in the long run. Shrewd investments will go a long way toward ensuring retention rates remain high. Here are a few ways businesses can take cost-effective steps to retain employees.
Develop their skills
If you were to sit down with an entry-level employee to discuss his or her future, you would probably scratch your head if the worker expressed staying in his or her current role forever. However, once that junior staffer leaves your organization, you're suddenly surprised that he or she accepted a better role at another company.
The fact is, you need to recognize that employees value a defined career path and a chance to advance to better roles. Even if it means losing some employees once they become more talented, executives and HR teams should invest in their skills in any way possible. Traditional training, mentorship programs and simply sitting down to discuss workers' future plans in a relaxed setting can help boost retention rates.
Monitor their performance
Part of the process of developing employees' skills is determining which talents they need to sharpen. Just as you wouldn't see an NFL quarterback working on his tackling skills, it doesn't make sense to develop a salesperson's IT talents.
By monitoring performance, you can figure out which skills certain professionals need to develop. While it's not always an easy task, creating a defined system to track sales, customer service or production data can be beneficial.