Employee retention is an organisation’s ability to mitigate employee turnover risks by motivating its staff to stay long term. It's about building strong relationships — providing employees with growth opportunities, filling them with a sense of accomplishment, pride, and mutual respect that drives long-term loyalty.
For everyone in the world of work, the name of the game for the last 18 months has been ‘survival’. Employees’ energy has been put towards ensuring they remain employed, employers learned how to hire virtually and manage work-from-home employees, and organisations focus on revenue recovery and business continuity.
Initially, employees were simply happy to be employed at a time when hundreds of thousands of people were furloughed or laid off as a result of the pandemic. However, as we begin to emerge into a post-COVID world, people are planning to quit the jobs they were extremely grateful to have at the height of the pandemic.
The reason? For one, as work from home becomes the ‘new normal’, the line between “work” and “life” has started to get blurred as remote workers are working longer hours, attending significantly more meetings than they had been doing before the pandemic, and holding out in unfulfilling roles which pays them too little and expects too much which is making them feel burned out more than ever before.
According to Microsoft’s latest Work Trend Index report, close to one-third of employees in India face increased burnout and disengagement while working from home. Second, there is a reluctance to return to physical offices now that employees have tasted greater flexibility and autonomy. As we transition into the ‘next normal’, where operating virtually anywhere in the world has started to become doable, employees who want greater flexibility with their job may now go out and find it.
According to Microsoft’s latest Work Trend Index report, close to one-third of employees in India face increased burnout and disengagement while working from home.
According to an Ernst & Young (EY) 2021 Work Reimagined Employee Survey, 54% of employees surveyed across 16 countries would consider leaving their job post-COVID-19 pandemic if they are not offered work from home. Third, organisations have been incompetent at maintaining a cohesive workplace culture and many employees report feeling undervalued or left behind by bosses who did not provide enough support during the pandemic.
Keeping these factors in mind, retention and turnover experts predict a fresh wave of voluntary departures and resignations which will increase significantly in 2021, as employees resume job searches they put off for the past year.
So where does that leave your organization?
Employee Retention in the Grand Scheme of Things
The impending pandemic has caused businesses to face a talent crisis, hence it becomes especially critical to not just attract top-tier talent but also to retain them. In India, the attrition rate of leading IT firms now is at an all-time high. As a result, these IT firms are facing difficulties in executing projects. When a valued employee does leave, either voluntarily or involuntarily, it usually causes disruptions to overall business performance and impacts results. For those remaining, morale and quality of work can take a hit. In addition, there is also the added time, cost, and effort required to recruit, train and orient a replacement employee of the same quality.
- Turnover is costly (for 87% companies in the US it costs between $15,000 and $25,000 to replace each millennial employee they lose)
- Unwanted turnover can have a significant negative impact on a company’s performance and employee morale.
- Retaining a quality employee is more efficient and far cheaper than hiring a new one.
Today, employee retention is more important than it has ever been, and understanding it can help an organisation’s leaders develop strategies to optimize workplace practices, cultivate a competent, satisfied, productive, and diverse workforce, and reduce attrition.
With more people working remotely now, it’s important to learn how to retain remote teams. Using pre-pandemic measures to retain work-from-home workers post-pandemic may not work out anymore since business strategy and workforce planning will look different post-pandemic.
With employees’ willingness to change jobs in the current economic environment, leaders will be forced to develop long-term work-from-home strategies, including focusing on well-being, re-skilling, restructuring, redefining company culture, maintaining engagement, increasing communication, improving socially distanced in-person training, collaboration tools and technology, online recognition system, and managing productivity to make them stay.
The COVID-19 pandemic has proven that flexible working is the new currency for attracting and retaining top talent and organisations that want to keep the best people now and in the next normal will need to put flexible working front and center of their hiring and talent strategies.
A comprehensive employee retention program can play a crucial role in both attracting and retaining valuable employees, as well as lowering the levels of turnover and its related costs – recruitment, onboarding, employee training, etc. An effective retention program addresses employee job satisfaction, employee engagement, and a healthy and supportive work culture as key drivers of employee retention. This encompasses things like:
- Treating employees respectfully at all levels
- Good compensation and employee benefits – paid leave, flexibility, employee assistance programs, healthcare coverage, and childcare support
- Good manager-employee relationship
- Job security
- Providing a forum for the employees to be able to showcase their skills
- Workplace flexibility
- Career development
- Personalized employee experience
- Trust in leadership
- Communicate regularly with transparency and empathy
How can HR professionals contribute to the employee experience and retain top talent?
The Human Resources team in any organization plays a crucial role in employee retention. HR leads the way in the design, measurement, and evaluation of proactive workplace policies and practices that help attract and retain talent with skills and competencies necessary for growth and sustainability.
As more employees have the opportunity to work from home, many are finding they like it and people just want to be their full selves at work because work is home, and home is work. As HR leaders, when you understand and empathise with your employees, make them feel like they belong, and that they’re important to the organisation, the employees naturally want to work harder and stay longer in their role. For human resources (HR) teams, that means—
- When hiring, employers will need to be more open to remote work and learn new skills to streamline video interviews and virtual onboarding.
- Besides video interviewing, digitising the recruitment process—digital copies of employee manuals, benefits, HR policies, procedures, rule books, and training manuals— which facilitates onboarding quickly and efficiently.
- Recruiters and hiring managers will need to work on evolving job skills like resiliency, adaptability, and independent problem-solving in a post-Covid-19 environment.
- HR leaders need to focus on internal promotions or internal hiring post-covid. This will ensure employee upskilling and can help improve the retention of top talent.
With decreased recruiting budgets, HR professionals will need cost-effective solutions that demonstrate a strong return on investment (ROI) and make sure the pipeline of new employees is solid
The Road Ahead
As we navigate through the COVID-19 pandemic, one thing is very clear, employee retention can become a bigger challenge in the future than in the past. Now is not the time to try to go back to ‘business as usual,’ what worked before the pandemic won’t work now.
However, being flexible with employees’ needs can be a game-changer. Regardless of your industry, business leaders will have to start fresh when it comes to retaining remote workers. HR leaders will have to try extra hard and find out what type of flexibility will help individuals be better and happier employees. Only those employees who are happy, satisfied, productive, and connected, tend to stay with their employers in the long run.