Retention is a term that is commonplace in any business. It is a key HR measure, and in many ways is a ‘happiness’ indicator. A high retention rate is generally viewed as a positive thing, and can be a good reflection of a company’s culture, leadership, performance etc. The thinking is, that if employees feel happy, engaged and see a future with a company, they will stay put and continue to add value to that organisation.
Having said that, the world of work as we know it has changed, and the impact on HR measures like retention, is tangible. I was at a conference recently where we were challenged on the purpose and value of retention strategies; i.e. in the modern workplace, should we even look to try and retain our employees? Is there any value in a retention measure any longer?
This may sound like a very bold statement, but the reality is that employees no longer begin and end their careers in a single company (as was common place in generations gone past), or even commit to an organisation for 5 or 6 years and then move on. Research shows that the millennial generation sees 1-3 years as a long period of employment, and that they will in fact have 15 – 20 different jobs in their working lives. Hence the value of retention rates becomes skewed, and puts new pressure on retention strategies. How do we keep employees, who see themselves leaving our company within the period of a year? Should we even try?
In order to unpack this and seek an answer, I think we need to first understand why this new workforce is so mobile.
Firstly, the workplace is now global, and therefore employees have far greater choice than ever before, and with technology we have opportunity to work across borders in a fluid way. Coupled with this, the millennial generation has seen the somewhat uninspiring result of their parents working their entire lives across 1 or 2 jobs in a single company. Many have worked tirelessly with poor work life balance and job satisfaction, for very little financial reward when they retire. Finally, they have witnessed contemporaries become millionaires at the age of 30, and they realise the pressure and potential to make progress and an impact as quickly as possible.
When you read between the lines, you realise that what the modern workforce are actually seeking, are skills, and more so, experiences. They realise that to grow and succeed quickly, they need to equip themselves with knowledge and skills that give them global scope, and to seek out experiences that will allow them to find job satisfaction, learn through practical exposure and keep them engaged.
Therefore, I do think that retention strategies are still possible, and the answer may lie in the world of learning and development.
According to the annual SAGEA Candidates Insights Survey of 2016, (which surveyed 2,052 new or future employees surveyed from 108 organisations in South Africa from March to May 2016), we see that the number 1 reason for a candidate deciding to apply to work at a company is: training and development. Not salary, or benefits, but development.
This is supported by a vast number of studies, and ties in strongly with the need for career advancement.
The question is, does it do enough to keep them employed?
As it stands, the research on this matter is not yet definitive, I think for the simple reason that this movie is yet to play out. But what is very clear is that this correlation between development and retention is becoming far more apparent.
According to CEB, career development is particularly relevant for retention, as about 70 percent of employees say they are dissatisfied with growth opportunities at their companies. The 2016 Deloitte Millennial Survey draws a similar conclusion stating that, “it is likely no coincidence that where millennials are most satisfied with their learning opportunities and professional development programs they are also likely to stay longer”.
We see companies responding to this, and ‘career development’ tops the list of perks employers say they plan to increase in 2016/2017, according to a new survey from Korn Ferry Hay Group.
Finally we see the impact in smaller companies who have placed development as a strategic focus for retention, such as FLEXcon, where 83% of FLEXcon workers can claim more than 10 years of tenure. They developed an immersive training programme for new hires, who had recently graduated from science programmes at nearby universities. We can also look to Location Labs, who developed clear career paths to help map out the development and growth of employees, and the result is that every executive has been promoted from within. The company boasts a 95% retention rate.
What can we take out of this?
- The demand for learning and development is abundantly clear. The modern employee wants to develop themselves and expects you to invest in them.
- The evidence to show increased retention rates due to development may still be anecdotal, but the message is clear that you will not even be considered if this is not a part of your company’s culture and strategy.
- I believe that millennials leave jobs to develop skills and experience something new. Tailor your development around these principles, and their need to find it elsewhere may quickly diminish.
- Be very clear on development programmes and career progression, and sell this actively to the market. Caution: only promise what you can deliver. Rather do less at a high quality, then promise what you cannot deliver.
- Think about internal mobility, job rotation, special projects, innovation hubs and other avenues to develop employees and keep them interested.
- Look to both mentoring and coaching. Two aspects that younger employees state are significant drawcards for them.
- Reward and recognise learners, and keep them engaged in their careers and ultimately your business.