Why Employee Retention Is More Critical Now Than Ever

A happy workers smiles at the office thanks to her manager's employee retention efforts

With a presidential election behind us and a new year ahead, businesses and job seekers are assessing the employment market and considering their next steps. If you are a manager, holding on to your best people should be a key concern, as I’ll explain in this post. First, though, let’s look at the latest jobs report data to understand the state of the current hiring market.

U.S. employers added 178,000 jobs in November, according to the Bureau of Labor Statistics (BLS). Payrolls have expanded by nearly 2 million positions since the beginning of 2016. So far this year, job growth has averaged 180,000 jobs per month.

The professional and business services sector added 63,000 jobs in November and has grown by 571,000 jobs over the past year. Healthcare employment rose by 28,000 jobs last month. In the past 12 months, this sector has added 407,000 jobs. 

Also in November, administrative and support services added 36,000 jobs, and employment rose by 18,000 in accounting and bookkeeping services.

The unemployment rate was 4.6 percent in November, a drop of 0.3 points from the month before and the lowest mark since 2007. The unemployment rate for college-degreed workers who are 25 or older also dropped, to just 2.3 percent — well below the national rate. 

In short, today’s report from the BLS shows that the job market remains strong. We’ve now seen a record 74 consecutive months of job growth. And the unemployment rate has been at 5.0 percent or below for 14 consecutive months. 

In this environment, you’re going to have to work harder to keep your most valuable employees because they know there is demand for their talents. Companies continue to hire and are having difficulty finding professionals with the specialized skills they need. Consider the following:

The new year: a time to reassess

The beginning of 2017 will bring the traditional new year’s resolutions, including some people who will be re-evaluating their careers. This is the time of year when job searching starts building momentum again after a lull during the holidays. 

The question for you is: Will some of your top performers decide to dip their toe in the employment market? It’s hard for you to know, of course, but this is still the right time to build a defense against turnover. Some firms have been doing this all year long, but that’s more often the exception than the rule. Now would be an ideal time to re-convince your team members their current role is the right one for them.

The election is over

While this is not true across the board, some professionals postponed their job search efforts until after the election to see what effect, if any, the outcome would have on the economy. With the release of the first jobs report following the election, some professionals may now feel confident enough to restart their efforts. This could include valued members of your team who are wondering if the grass is greener elsewhere.

It’s a good time to be a job seeker

According to the Job Openings and Labor Turnover Survey (JOLTS) from the BLS, there were 5.5 million job openings in September. A large number of unfilled positions tempts more people to voluntarily leave their jobs for new, hopefully better, ones. Your savviest competitors don’t have their heads in the sand: They know this and may be targeting your top performers. 

Be the employer of choice

So, how do you convince your employees that yours is the best possible workplace for them? 
Here are some ideas for providing a work experience that will make your greatest assets want to stay with you:

Start with your salaries

No, money isn’t everything to workers today, but salary is still one of the most convincing factors when it comes to retaining your best people. With starting salaries for U.S. professional occupations predicted to rise 3.6 percent next year, it’s crucial the compensation you offer remains at least in line with that of other firms in your industry and region. But even that may not be enough. Do everything you can to push your salaries just a little higher than what your competitors are offering. 

An attractive salary is especially pivotal in keeping Generation Z employees, who came of age in the Great Recession and may value financial stability more than previous generations do. 

Show you understand that people have a personal life

It’s getting more and more critical to help your teams reconcile expectations at work with those at home. In a recent Robert Half survey, 54 percent of workers polled said they are more committed to their personal lives today than they were last year. By giving staff the flexibility to handle priorities at home, you can reduce the chance they’ll jump ship if one of your competitors offers them a little more money.

Flextime, a compressed workweek and job sharing have long been tools to accommodate employees’ work-life balance needs. Today, thanks to technology, working remotely has become the go-to solution for many workers and companies. It’s easier than ever, as the internet, mobile devices and high-speed data connections allow many jobs to be routinely performed off-site.

But the success of any of these programs depends on how they’re managed. The lack of face-to-face contact and daily interaction with key staff — the downsides of remote working — require good communication between managers and participating employees. The challenge is deeper for managers with workers who are rarely in the office, but even casual telecommuters need regular feedback and assurance they don’t miss critical announcements. Encourage remote staff to attend office events in person whenever possible, especially get-togethers to celebrate team projects. 

Reassess fit with the job and culture

It’s often said that managers have two jobs: their own and those of their teams. Of course, you’re busier than ever — that’s a given — but a key part of any serious retention effort is carving out time to ensure your employees still feel they are in the right workplace environment — the one they were so excited to join when they were hired. 

Periodically step back to think about this fit across your team. Have discussions to find out if staff think they are still being challenged in their role, what they enjoy most about the job and whether they still get that rewarding glow when they’re shown how much their contributions are appreciated. 

If you sense a degree of discontentment, give some serious thought to making job adjustments or moving people to new areas where they can thrive again. 

Help them keep growing

When you encourage — and facilitate — your employees’ professional development, the message you’re sending is that you care about it as much as they do. That’s a compelling reason for them to stay with your company. 

Millennials, in particular, have a keen interest in personal and professional growth. They want stretch assignments as well as clear paths for career advancement. Make sure your professional development efforts go beyond mere training, which is designed to help staff perform the tasks that are part of their jobs. Focus on development that truly helps employees build interpersonal and leadership skills and readies them for future roles.

Mentoring is a powerful way to accomplish this. And it’s a win-win. Mentees gain skills that will enable them to contribute at a higher level, while mentors build leadership skills. And don’t forget: Mentors are also employees you want to retain: The sense of gratification they get from helping others could prevent them from shifting their gaze to other organizations. 

An overwhelming majority of CFOs interviewed in a recent Robert Half survey (86 percent) said that having a mentor is important for career development. But the same survey found that only 26 percent of workers actually have a mentor. That’s a retention opportunity you can easily take advantage of. 

Make no mistake: A company lives and dies on the quality and commitment of its people. If you make sure yours remain happy and engaged, you may just earn their loyalty.