WorkLife Research: A guide to the retention strategies that matter most to employees
Hiring, onboarding and training new employees is expensive. To avoid this added cost, companies may find that engaging and supporting their current employees helps to retain a productive and loyal workforce. While attrition is natural, companies must monitor employee satisfaction and deliver growth opportunities to retain employees that the company has already invested in developing.
A study conducted by HR Acuity last year found that 37% of employees feel their employer lacks empathy, fairness and authenticity. Over a third of the 2,000 surveyed employees said they don’t fully trust their employer to make equitable decisions. Without trust, a loyal relationship between employee and employer is hard to build.
“Gen X parents were told you get a degree, you get a job, and you stay at that job for 25 years, or until you retire. In 2020 we saw this change, that as much as employees were loyal to the company, employers were not loyal to their employees,” explained Eric Mochnacz, director of operations at Red Clover, an HR consulting firm.
People want to feel cared for in the workplace, according to Nebel Crowhurst, chief people officer at Reward Gateway | Edenred, a global employee experience company. She said when employees have peace of mind at work they can sustain a healthy lifestyle and can present the best versions of themselves at work. “People that are more fulfilled as a whole human are going to be able to work better,” Crowhurst said.
Methodology
To better understand the policies affecting employee retention and hiring, Worklife surveyed 123 HR professionals who work in internal operations or talent acquisition. We asked what policies most affect employee retention and the most common reasons employees leave their companies. We also asked how HR pros measure employee satisfaction and find job candidates for open positions.
Additionally, HR experts shared their insights in sit-down interviews with our research team to further delve into the way companies retain a skilled workforce and ensure workers receive proper compensation.
Workplace flexibility helps companies retain staff
According to WorkLife’s survey of HR professionals, outside of salary compensation, policies that promote flexibility and predictability in the workplace have the most positive impact on employee retention. Rather than valuing social get-togethers and in-office perks, employees look for autonomy around their everyday schedules with guaranteed benefits such as health insurance and personal time off.
“Employees are looking for both flexibility and some predictability,” explained Rebecca Trotsky, chief people officer at HR Acuity. “People expect change, but at least they expect their employers to be predictable in policies and in ways of working that they’re not caught off guard.”
A third of respondents to WorkLife’s survey (33%) selected work-from-home flexibility as the policy that has the most positive impact on employee retention. This highlights the continued value employees place on having access to hybrid schedules, especially for those with established careers or with children at home.
“Allowing people to work where they believe they’re going to be more productive has been huge,” said Ray Martinelli, chief people officer at Contentful, a content management platform. “Employees are demanding it. And that doesn’t mean that they have to be allowed to work at home every day, but rather giving them the flexibility to work in an office if they’re close enough, or to work from home.”
Adam Russo, CEO at The Phia Group, a health care cost consulting and legal service firm, said that, since the Covid-19 pandemic, he has shifted his attention away from ensuring employees are back in the office to spending the company’s money wisely on resources, such as better technology and smaller office spaces for hybrid work. “I just moved on from it [in-office work] and focus on technology,” Russo said. “There are people that actually do want to come to work and also feel they’re better performing in person with other people. I’m not begging. I’m not incentivizing. These people don’t want to be at home all day.”
A survey by The American Staffing Association Workforce Monitor, conducted by The Harris Poll, had similar findings to WorkLife’s survey. Workforce Monitor found that 39% of surveyed U.S. adults age 18 and older said that hybrid work was their ideal work schedule. The percentage was even higher for those in households with children under 18, with 46% of those respondents saying they preferred a hybrid schedule.
“It comes down to choice. People want choice,” Red Clover’s Mochnacz said. “Employers gave employees a choice over two or three years, and we saw a lot of people move. ‘I’m going to move to North Carolina, even though my office is in New York City because I have family in North Carolina.’ And then, all of a sudden, these New York City-based companies require them to return to the office? That is where the tension lies because they’re taking away the choice.”
“People are also seeing that working from home five days a week has its challenges as well,” Contentful’s Martinelli said. “You don’t connect with people as much. You can’t have that ongoing connection that is so important in hallway conversations.”
Offering a hybrid work schedule to employees can also be seen as a sign of mutual respect, according to Jamie Kohn, senior director of research in the Gartner HR Practice. “A lot of employees see return to office policies as a sign that they aren’t trusted or respected by their workplace to manage their own time and work,” Kohn said. ”We are seeing that when people don’t have that flexibility, they are more likely to look for another role.”
Members of Gen Z, especially, have made their hybrid work preferences clear, and other generations are also advocating for more flexibility in their work schedules. “What Gen Z is looking for in that flexibility of choice is rubbing off on their Gen X and even millennial colleagues,” Mochnacz said. “There’s something about the idea of ‘I’ve worked hard for this. I should get the same flexibility that is afforded to someone who’s only been in the workforce for two or three years.’”
In fact, according to HR experts, Gen Zers are embracing hybrid schedules instead of remote-only work because they’ve learned the value of showing up in person to give themselves the benefit of mentorship opportunities and to build relationships with company leaders, especially direct managers.
“Gen Z wants it because they want the flexibility and choice, and ultimately, connecting with colleagues,” Mochnacz said. “There are times [Gen Z] could work from home, but they go in because they just need to be around people. But it’s their choice, and doing it to develop relationships with the people that they want to develop on their schedule and time.”
“One might expect that Gen Z would be rooting for fully remote work, but we didn’t find that that was the case,” said Richard Wahlquist, CEO of the American Staffing Association, the trade association representing the American staffing industry. “We found that the younger generation felt that they were probably going to be hindered in their careers by working remotely.”
“Older workers have probably had the opportunity over their careers to have mentors, to have been mentors, understood workplace best practices and are probably at a stage in their life where they’re not really thinking about too many more steps in the corporate ladder,” Wahlquist added.
Managers’ relationships with employees can be make-or-break for retention
There’s a common adage that people don’t leave bad jobs, they leave bad managers. That could be why having consistent meetings with managers has made its way up to a high position on the list of the most effective policies to help retain talented employees, according to WorkLife’s survey. Regular one-on-one check-ins with managers came in third place among the policies asked about in the survey that have the most positive impact on employee retention, after work-from-home flexibility and traditional employee benefits. Seventeen percent of respondents selected this option.
“It’s more about that check-in conversation being first of all, ‘How are you as a person? What’s going on in your world? What’s great? What’s not? How can I help you as a manager?’” explained Reward Gateway/Edenred’s Crowhurst. “Then, of course, there is an element of a conversation that’s more task driven. ‘Do you know what’s going on in terms of your workload? Where do you need focus or support?’ But finally, our emphasis is much more about developing managers as coaches. We’re trying to bring to life this coaching mindset in how we manage people.”
According to the HR experts interviewed for this report, managers who regularly check in with their team members will have a better understanding of the team members’ career paths and be better positioned to help develop those team members individually. Additionally, when growth opportunities open up on other teams within a company, managers who check in with their team members will be better able to advocate for their employees to relocate within the organization — rather than losing them to other companies.
“Most people say they don’t feel supported by their managers when looking for a job internally, and so it just often happens that it’s easier to look externally than to try to find an opportunity within the company,” Gartner’s Kohn said.
HR Acuity’s study found that trust in managers is actually higher within hybrid work environments. “We sampled 2,200 employees that participated in this [study] across a variety of industries, and trust in employers was highest at 77% in hybrid environments that were stable,” HR Acuity’s Trotsky said.
Therefore, as hybrid work environments modernize, the training required of managers must follow suit to help them effectively support a team. “Manager training programs have to evolve with the times,” Contentful’s Martinelli said. “The programs you put in place today may be different a year from now, based on the dynamics of the world. Working and supporting employees in a hybrid work environment is absolutely key.”
Why dissatisfied employees leave
Job hopping is on the rise, especially by younger professionals who aren’t afraid to seek roles elsewhere for better opportunities. “The days of people going to college and saying, ‘I’m gonna be an accountant for the next 20 years with the goal of being a CFO’ is just sort of outdated,” said Danny Abdo, COO of virtual training platform Skillable. “Career growth is about building your skills, your experiences, and that’s the new ladder.”
In fact, the most common reason employees leave companies is lack of career growth, according to WorkLife’s survey. More than one-quarter of survey respondents (28%) selected lack of career growth opportunities as the most common reason employees leave their companies. Salary grievances came in second, with 25% of HR professionals saying dissatisfaction with compensation was the top reason employees resigned.
While WorkLife’s survey found that lack of career growth is the top reason employees leave a company, career growth training came fourth place among the policies that have the most positive impact on employee retention. This might indicate that employees who receive on-the-job training and learning opportunities see a clear path for career advancement and don’t feel the need to move to other companies, while those who don’t receive similar training are driven to seek job opportunities elsewhere. Or, it could indicate that companies are not offering the training opportunities employees desire.
The HR experts WorkLife interviewed for this report said it’s important to understand what offerings workers define as career growth opportunities. “People want to learn skills that make them more marketable in their career, not just skills that make them better at their current job,” Gartner’s Kohn said. “So, while the company might be focused on training that helps employees do their jobs better, employees are thinking about their careers much more broadly.”
“Offering employees the ability to grow and develop in their roles is a demand that we’re getting from a lot of employees,” Contentful’s Martinelli explained. “That means offering people the ability to understand where they are in their career, what it’s going to take for them to be successful in the current role they’re in, but also offering them the ability to see a framework for how they can grow and develop either within that role or within other roles.”
Some workers might not feel that the on-the-job training they do receive is appropriately matched to salary raises or title promotions they are given, according to WorkLife’s analysis. Often, with additional training comes extended job responsibilities, but, when a clear promotion structure is not outlined, an employee may be asked to take on more work for the same compensation.
Instead of seeking formalized training programs, some employees look for strong mentorships and a positive work environment that naturally provides advanced learning opportunities, clear career development paths and compensation increases. Without a clear view of these opportunities and salary improvements, employees are more likely to look for positions elsewhere explained Red Clover’s Mochnacz.
“When [employees] don’t see the impact or the outcome at work, it’s just, oh, I learned a new skill, but nothing came of it except my own learning. What was the purpose then, right?,” Mochnacz said.
Additionally, not every worker wants their career to advance to a position that involves managing other employees, according to Mochnacz. Employees who would rather focus on developing their technical skills and responsibilities rather than leading a team of workers also need opportunities to grow within their organizations, he said.
“How are you creating scenarios in your company where someone can still grow within the organization, without having to be a people manager?” Mochnacz asked rhetorically, adding, “There’s an incorrect assumption that the only way that someone can grow is if they take on people management responsibilities. Companies need to realize that you can have these two divergent professional development paths where ultimately someone can improve their title, increase their salary and potentially increase their incentive compensation, but it’s not tied to people management.”
Providing opportunities for feedback is vital to gauge employee satisfaction
To gauge employee satisfaction, over half of HR professionals surveyed by WorkLife (57%) said that their companies use employee satisfaction surveys. And many HR pros said they receive robust participation from their staff. Nearly a third of survey respondents (31%) said that 80% or more of their employees complete satisfaction surveys, and 43% said that between 60% and 79% of employees complete them.
“Their ability to get feedback and continuously improve is fundamental to the company’s success,” said Josh Bersin, global industry analyst and CEO of the Josh Bersin Company. “In a perfect world, the manager or leader should be constantly asking for feedback. What can I do, what can we do to make this place better.”
While exit interviews have traditionally been the sole source that helps companies understand why employees leave, annual employee satisfaction surveys are now a more common option to help companies identify potential problems before employees go elsewhere. “We’re working on introducing and building up more retention interviews, rather than just looking at exit data, because you’re much more likely to get a true reflection of where someone’s at when they’re in the organization,” said Reward Gateway/Edenred’s Crowhurst.
In fact, Reward Gateway/Edenred has started to move away from a single annual survey to more frequent weekly or bi-weekly pulse surveys — a short questionnaire sent out regularly to gather feedback from employees. “I think a lot of people get a bit hung up with these massive surveys with like 90 questions,” Crowhurst said. “It’s all a bit much for people to digest and understand the insights.”
Some companies are hoping to understand, and head off, employee dissatisfaction by giving staffers the option to anonymously report incidents of misconduct in the workplace. According to HR Acuity’s 2024 report on Rethinking the Employee Experience, 41% of employees have experienced or witnessed inappropriate, unethical or illegal behaviors in the workplace since the start of 2023. Fifty percent of employees said they have experienced harassment in their remote work environments in 2024, up 32 percentage points from the year prior.
“I would encourage employers to look at their policies around anonymous reporting of situations, because they can’t resolve anything unless there are multiple ways that employees can report when things are going wrong and their processes for handling them,” HR Acuity’s Trotsky said.
Trotsky added that it is especially important for companies to properly investigate reported issues in order to retain current employees and to attract new ones. According to HR Acuity’s study, 36% of employees said they would likely recommend their place of employment, overall. Yet, among the employees who said they were exposed to harassment or misconduct in the workplace, the recommendation rate jumped to 51% of employees when the reported issue was investigated and resolved.
“All of these things have a huge impact on trust in the employer, which then drives retention as well as advocacy for the organization,” Trotsky said.
Keep an eye out for part two of this research report, in which we’ll look into the most effective hiring policies companies used in 2024, as well as the difficulties they faced when searching for new employees.