By Dr Mark Bussin
May 6, 2023
Talent shortages, a competitive job market, exacerbated turnover costs, organisations’ reputation, loss of time, employee engagement, employee loyalty, employee adaptability, organisational culture damage, organisational knowledge… these are just some of the key words accentuating why retention is more important now than ever before. Retention can be defined as an organisation’s ability “to hold and keep in possession and to engage the services of high potentials (HIPOs) and value contributors in mission critical and scarce skills positions”.
You may or may not yet have discovered the after-effect of losing valuable employees. But one thing is for sure – it will eventually catch up on you and may have done so already.
Time to make a quick turnaround? It’s as simple as getting an effective retention strategy in place to control employee turnover and keep the organisation functioning at the optimum level. How can this be done? Simple. 1) Get to the bottom of why employees are leaving and 2) attack the problem.
Peeling the layers of retention
Why are retention strategies in such high demand? Why the increased focus from management research and workplace training on retention? Why not focus on greater productivity, better teamwork, or even leadership skills? The simple answer is that all these factors are just sub-factors of retention. In fact, research shows that employees primarily leave organisations for a variety of reasons, some of which may come as a surprise. Here are some myths and truths about retention:
- Myth: Money is the main reason people leave
Truth: Being underpaid can affect an employee’s willingness to stay at an organisation. For instance, in a survey, the fifth most prominent reason for employees quitting was because their pay levels were perceived as unfair when compared to their performance. But when an employee is paid in line with the market level pay and they still want to leave, you can expect that there are underlying factors at play.
- Myth: Hiring isn’t correlated to retention
Truth: In fact, hiring and retention have a strong correlation. It is important to recruit and select people who are fitting for the job as well as being the most likely to be loyal to the company.
- Myth: Training employees means that you are merely training them for another employer
Truth: Actually, employees stay when they are trained as they see the organisation is willing to invest in them, and they are given opportunities for growth. By training employees, you may just increase their loyalty and happiness within the organisation.
Primary retention drivers
While several factors contribute to retention, two factors stand out in the crowd: commitment and engagement, depicted in the below diagram.
Engagement is the state in which individuals are emotionally and intellectually committed to the organisation or group which impacts retention.
Commitment drives performance and retention. It has both an emotional component – the extent to which employees value, enjoy, and believe in their organisation, as well as a rational component – the extent to which employees believe it is in their best interest to stay with the organisation.
So how do we drive engagement and commitment? Essentially, how do we drive retention?
Remuneration alone cannot lead to a successful retention strategy; 21st Century research suggests that it is only 25% of the stay decision. The other 75% is inspirational leadership, great culture, great career, great workplace, and great performance feedback.
When looking at retention strategies, the best option is to spend resources on developing managers and on leadership skills. Only then should reward packages be considered. There are many options in developing reward strategies discussed in this book so get ready to unleash the power of retention and transform your organisation into an unstoppable force in the market and power on toward success and growth.
If you would like to learn more about the latest research on the role of remuneration in retaining talent make sure you don’t miss the Remuneration for a Better World of Work Seminar 2023 on 25 July 2023, delivered online live via Zoom. Gain valuable knowledge, connect with industry experts, and explore effective strategies to enhance your organization’s talent retention efforts. Click HERE to access more information and secure your spot today! Click HERE for more information.
This article was written by Dr. Mark Bussin, Chair of 21st Century, a renowned professor at multiple universities, and a seasoned executive who has held C-suite positions in multinational organisations across the mining, banking, FMCG, and professional services sectors. With his wealth of knowledge and experience, Mark is also a prolific author, having published several highly acclaimed books through KR Publishing. Here are a few of his recent works: