Is long-term employee retention a losing battle?
Is the concept of a job for life dead?
The mass reassessment of careers people have undergone over the past few years – described by many as the Great Resignation, by others as the Great Reshufffle – is showing no signs of calming down. In fact, in the U.K., the trend seems to be accelerating.
More than 6.5 million people (20% of the U.K. workforce) are expected to quit their job in the next 12 months, according to estimates from the Charted Institute of Personnel and Development (CIPD), which published the data in June after surveying more than 6,000 workers. That’s up from 2021, when 16% of the U.K. workforce said they plan to quit within a year, according to the CIPD. Meanwhile, in March Microsoft’s global Work Trend Index found that 52% of Gen Zers and Millennials — the two generations that represent the vast majority of the workforce — were likely to consider changing jobs within the following year.
Tania Garrett, chief people officer at Unit4, a global cloud software provider for services companies, argued that it is time for organizations to get real — they are no longer recruiting people for the long term. Instead, they should embrace this reality, and stop creating rewards that encourage more extended service from employees. “We are seeing a fundamental transformation in how people manage their careers,” said Garrett. “The pandemic led more people to rethink their attitude to work and how it fits with their personal lives.”
Steve Cadigan, founding chief human resources officer of LinkedIn, agreed that it is now wrongheaded to treat employee retention as business critical. “They’re going to leave anyway, and if you’re only caring about people when they work for you, you’re missing a big opportunity,” he said.
Despite the current economic uncertainty, pay raises aren’t a slam-dunk when it comes to top-talent retention, instead, the quality of the employee experience is becoming more critical, according to the CIPD study’s conclusion. “In essence, job mobility has become more important than job security [in the corporate world],” said Garrett.
As such, organizations must rethink how they manage their talent and how roles are advertised — for example, not talking about long-term benefits like retention bonuses, pension contributions and other provisions that celebrate long tenure. “This change requires a radical mindset shift,” Garrett added.
Investing in employees and developing skills
Garrett urged businesses — and HR professionals specifically — to focus on developing skills they want employees to leave with, even if they move to a competitor. Of course, it’s a catch-22. But she advocated that organizations need to invest in their members of staff beyond the more traditional golden-handcuff methods like the promise of annual pay raises and bonuses, or in the U.K. meaty bonuses — or they will risk losing out on attracting top talent.
“Companies can no longer withhold investment in professional development if they’re concerned about employees leaving,” said Garrett. “It means understanding a relationship with an employee doesn’t end when you hand them a P45 [a document given to employees when they leave a job in the U.K.].”
She added that those leavers could remain valuable as alumni who become future customers. Or even boomerang employees who return with additional skills and settle back in much quicker than new hires.
Supporting employees as they map out their career paths beyond their time at an organization is likely – and understandably perhaps -alien to most employers. But in time, it may become a differentiator, Garrett stressed.
Some businesses are already embracing the concept. Chipotle, a Mexican food chain, has established an employee portal named Cultivate Me that offers educational assistance and a range of other benefits. Essentially, employees can work for the company while training for a qualification that, once complete, will probably trigger their departure. And other major brands like McDonalds, Dollar General and Starbucks all pour investment into helping improve the education opportunities for their frontline workers, even if it leads to them moving on to pursue other careers.
Nurturing talent
This approach to helping develop employees for careers that may take them outside the organization, is catching on. Retailer Primark is among those to embrace it. John Hadeed, Primark U.S.’s head of people and culture, said: “Whether someone is with us for two years, ten years, or — like our U.S. president Kevin Tulip — 20 years, we’re providing skills and experiences that will help to propel them forward. And if they do leave, hopefully they will come back to us at some point in the future.”
And, ironically, by engaging staff members in this human, nurturing way — focusing on career-development benefits rather than trying to tie people to the organization by dangling a big financial carrot — the chance of them hanging around for longer increases. Why? Because they are enjoying their employee experience.
Listening and learning from employees is crucial. Rich Bye, vp of workforce and payroll strategy and EMEA strategic growth at software firm Workday, revealed that his company measures the answers staff provide in regular surveys around four areas: advocacy, loyalty, satisfaction and belief.
“These behaviors are what we expect from an engaged employee,” said Bye. Workers are requested to rank their feelings on these points on a scale of zero to ten. If the scores drop, it hints that something is not quite right. At this point, a line manager knows to dig deeper in a human, relaxed and open-minded way. He also said that employers should focus on work outputs and performance rather than the time taken to achieve something. “Discussions about hours worked can often lead to a toxic culture around overtime, so instead, leaders should focus on setting clear objectives for employees that align to overall business goals,” Bye added.
Technology enables better EX
Alongside adopting a more human management approach to talent, technology that empowers employees is vital, said New York-based Mike Morini, CEO of WorkForce Software. And this is an area where many organizations — particularly those with deskless workers — can improve. “Many employers struggle to deliver reward programs in meaningful ways to their frontline or deskless workers, who comprise over 80% of the global workforce,” said Morini.
Indeed, his company’s 2022 Workforce Experience Gap report revealed that outdated systems and technology tools made it almost impossible to meet employee needs adequately or use data to detect and avoid potential challenges. Morini said the call to action for employers is clear: “They should place greater focus on transforming the experiences employees have when planning for and performing work itself.”
Innovative scheduling technologies and integrated consumer-grade communications capabilities are now on the market, and these will improve the experience of all staff, whether deskless or remote workers. “Such tools can enable staff to gain better control and enjoy work experiences closer to those they have come to expect in their personal lives,” added Morini.
Ultimately, if workers feel more at home and comfortable at work, they might stay at the organization for longer — although now that should be viewed as pleasant surprise rather than an expectation.