The three most significant factors that should matter to hiring professionals in contemporary times are retention, retention, and only retention. The unstable economy, along with the cost-of-living crisis, has resulted in more resignations than workforce reductions. Consequently, it has resulted in a surge in employee turnover, which is bad for several reasons, such as productivity declines, morale suffers, and drawing good candidates becomes increasingly tough.
Nevertheless, employee turnover is an expensive ordeal. It is calculated that the cost of employee churn ranges between 90% and 200% of an employee’s complete salary package. Lots of those expenses are hidden. That’s why many of those don’t appear in the profit and loss statement of the company. However, when you consider recruiting and training costs as well as the loss of experienced staff, it becomes evident that excessive turnover can negatively influence an organisation.
Even though you can hire the best talents through headhunting firms, your approaches to employee retention can vary based on the whims of the job market and industry. However, the primary step to gaining insight regarding its significance is to debunk some of the myths surrounding it. To know more about it, check out the following prevalent misconceptions regarding employee retention:
Hiring has no relation to retention
It may seem that employee attrition is entirely a managerial problem, but the reality is that recruiters have a great influence on whether a candidate stays or quits a job. Moreover, it cannot be denied that they’re the first point of contact for the employees in every company. That’s why a positive hiring experience can change the perception of a company for a candidate to a great degree. On the other hand, a negative working experience can make someone impatient to leave a company even before they have completed six months in the company.
A study done by the Human Capital Institute states that 20% of the new hires resign within 45 days of joining. The basic reason for this is not meeting their expectations created during the recruitment period. Also, those who resign quickly not only leave a hole in the org chart but also leave the other team members dejected and confused.
Company culture isn’t important
One of the main reasons most people leave their jobs is money. As per the Job Optimism Survey by Robert Half in 2022, 65% of the candidates stated that a higher salary was the primary reason for searching for new job opportunities. The second reason was the absence of good benefits in the overall package for seeking other employment. Last but not least, discontentment with the company culture made them look for new opportunities.
It has been found that the corporate environment is one of the top factors in employee retention. In actuality, it leads to more attrition compared to other factors. The main causes of workplace toxicity include failing to promote DEI, unethical behaviour, and disrespecting employees.
Employees leave if they’re not promoted
Promotions serve as a form of recognition for an employee’s hard work, skills, and dedication. When employees see that their efforts are being rewarded with career advancement, they are more motivated to continue performing at a high level. However, if an employee is promoted and the new role or responsibilities don’t align with their expectations or career goals, it can lead to dissatisfaction and potentially drive them to leave the organisation. It’s essential to have clear and open communication about what the promotion entails and whether it aligns with the employee’s aspirations. Employees who are promoted without proper training and development assistance may underperform and get frustrated. Employees may leave if they do not have the resources they need to succeed in their new responsibilities.
Focussing on employees solves attrition problem
That’s true and false simultaneously. It’s true that understanding the needs and motivations of employees is vital to ensuring retention. On the other hand, when you’re not offering enough support to your managers, it will not solve the attrition problem. In other words, managers need to be properly guided, trained, and set up for long-term success. Also, being fairly treated by the manager is another important factor that helps with retention. Although these are the best ways for long-term employee retention, they’re often the most disregarded.
Pay transparency leads to attrition
For many years, organisations kept a distance from the idea of implementing salary transparency because all the lowest-paid employees would leave the company. However, reality is just the opposite, as it has been found that organisations implementing pay transparency have experienced increased performance, proving its positive impact on retention. Even a study by Payscale stated that employees are more likely to leave their jobs if pay transparency is absent in an organisation.
Overall, talking openly about salary helps build trust among the employees and helps them consider a long-term career in an organisation.
Understanding employee retention myths is essential for organisations aiming to establish and keep a pleased, engaged, and loyal staff. We may pave the road for more successful retention efforts by dispelling these beliefs. The necessity of comprehensive and deliberate approaches to employee retention is shown by debunking these myths. Recognising the intricacies of individual motivations, comprehensive salary packages, well-deserved promotions, and fair transparency may pave the path for happier, more devoted employees who are more likely to stay and grow within the organisation. Understanding these fallacies, in the end, enables organisations to negotiate the ever-changing terrain of employee retention with insight and success.