Five employee retention strategies for diverse workforces
As the idea of ‘a job for life’ is being eroded and replaced by shorter tenures, the nature of job roles is changing, and with it, employee retention and turnover. According to the CIPD’s 2020 Resourcing and Planning Survey, the rate of voluntary employee turnover almost doubled from 5.5% in 2014 to 10.1% in 2019.
This matters to businesses. As reported by Oxford Economics and Unum, in 2014 the average loss of an employee earning £25,000 or more, cost a company an average of £30,614.
Before we detail the five crucial yet simple strategies you can implement to increase employee retention, it’s important to recognise how the challenge differs depending on age, race, and gender diversity.
How does employee retention differ between generations?
Increasing turnover is being driven by the young – the ONS reports that 16.4% of 25 to 34-year-olds changed job in 2018, compared to 5.5% of 50 to 64-year-olds, driven by the opportunity to earn more: in 2018, job-changers saw their pay grow by 7.3% as opposed to 3% for stayers.
Now it’s a given that older workers are more likely to be in more stable, high-paying roles, and thus less likely to move, however according to a LinkedIn survey from 2016, 90% of global professionals want to hear from a recruiter, and the number actively searching for new opportunities grew from 25% in 2013 to 36% in 2016. What’s more, a 2018 survey from Robert Half found 51% of over 55s in the US thought job-hopping was beneficial, rising to a massive 75% of 18 to 34-year-olds.
Workers of all ages are not having their needs and desires met by their employers – offering significant opportunities for businesses that act now.
How does ethnicity affect retention?
While there isn’t a conclusive body of research on the impact of diversity on retention – some studies have found no statistically significant impact whereas others have – it’s nevertheless crucial that you account for diversity when tackling turnover.
All employees should feel appreciated and looked after in their workplaces, regardless of their ethnicity, gender or otherwise, and the benefits are clear: a 2020 study found that a diverse workplace climate improved retention amongst nearly all employees.
Does gender affect employee turnover?
According to the Network of Executive Women’s 2018 report, turnover rates for woman amongst US retail and consumer goods employees are 7% higher than men (31% to 24%), female managers have an 11% higher turnover rate compared to men (24% to 13%), while the rate for female senior executives was four times higher than men (27% to 7%).
Retaining talented women is primarily down to creating the right culture. Protection from harassment or discrimination should be a given. Going further, businesses should permit more flexible working arrangements and welcoming workplace cultures that are free from the systemic biases that stop women from working and progressing up the hierarchy.
So how do you create an employee retention strategy that accounts for these differences in age, race, and gender? How can you make sure your approach to employee retention accounts for pandemic-driven workplace changes and employee desires that will continue to ring true going forward? The five employee retention strategies below will put you on a firm footing to improve your retention now and into the long term.
1 – Understand and provide tailored employee value propositions
The things that drive workers are changing. Money was and always will be a key consideration for some, but with the pandemic curtailing spending opportunities and putting into sharp focus what matters to individuals, many are reconsidering what they want from their experience at work.
For millennials and Gen Zs, sustainability, diversity and inclusion, charity efforts, and mental health are crucial drivers. Deloitte’s 2020 Global Millennial Survey found that amidst the pandemic, younger generations were unyielding in their values, and want to positively shape the world. If employers can’t do business ethically, they will score low marks with this significant and growing part of the workforce, and ultimately fail to attract the best and brightest.
Older employees similarly yearn for meaning from their work. In the Centre for Aging Better’s 2017 study, it was found these workers want the opportunity to learn and share their knowledge via mentoring opportunities, as well as career progression. Many also value a positive work-life balance; health was seen to have the greatest effect on whether older employees wished to continue working, making flexibility, reduced hours, and workplace adjustments crucial considerations for employers.
For women and minorities, invest in unconscious bias and diversity and inclusion training to put an end to systemic biases within your organisation that put off or restrict diverse talent. The creation of mentorship networks can also help; the Network of Executive Women’s report found that fewer women than men did not think there were role models they could relate to in their workplace.
2 – Make progression possible
All employee cohorts want to develop their skills and progress in their careers, but many are not given the change, harming retention.
In 2015, 70% of workers were dissatisfied with future career opportunities according to Gartner, partly owing to flatter organisational structures that meant employees spent up to three years more in a role than five years before.
This isn’t good for retention. Glassdoor’s 2017 statistical analysis of user behaviour looked into why workers quit their jobs, and found that for every 10 months an employee was in a role, they were 1% more likely to leave the company – a statistically significant amount that, when combined with other factors, can cost employers a large amount of money.
Employees want to progress because it offers a route to greater compensation and responsibility and makes them feel a valued part of their company, but what does providing progression actually mean in practice?
– Provide regular appraisals tied to agreed targets with pre-defined success outcomes.
– Advertise posts within your organisation before they go public.
– Encourage employees with the right skills to apply for internal roles.
– Define and publish career progression paths within the organisation – noting expected skills and experience.
– Promote discussion between employees and managers around career goals.
– Invest in inclusive leadership training so your managers are unbiased in their appraisal of diverse talent.
3 – Provide flexibility, yesterday
While they were discussed on a limited basis prior to 2020, flexible, hybrid working policies are firmly in the spotlight and can no longer be ignored by businesses. The pandemic experience has shown unequivocally that most companies are just as productive working from home – up to 13% more productive, by some accounts.
Working conditions are a key driver for employees wishing to improve their jobs. In 2018, a Deloitte survey of millennials found that a lack of workplace flexibility was the main reason why they changed employer, and half of parents and carers surveyed in June 2020 were preparing to change their post-pandemic working patterns so their careers accommodate childcare in a more holistic way.
Flexibility is no longer a fringe idea embraced by the most progressive workplaces – all workers see the benefit and will consider a company’s approach when contemplating their career and work-life balance.
4 – Improve your recruitment processes
It’s a simple fact, but if your recruitment processes are not up to standard, you will be more likely to hire individuals who are not a good fit for your organisation. The result? They don’t feel part of the workplace and don’t gel with the culture, or don’t have the skills or attitude to succeed. Eventually, they leave the company.
Hiring decision makers understand this – 37% of them thought their retention rates would significantly improve if new hires were better informed during the hiring process, according to 2017 Glassdoor data – but what specific recruitment strategies can you employ to improve diverse talent retention?
– Clearer job descriptions – If you can better inform prospective candidates of what their role will specifically involve and your workplace culture, the lower the likelihood they will experience an unwelcome shock once hired.
– Improve your interview process – In advance, ensure your recruitment panel prepares questions, agrees on scoring and individual roles, and understands how to create a welcoming atmosphere that allows for a productive and enlightening interview.
– Make your recruitment inclusive – Many employees, particularly those in younger cohorts, strongly care about diversity and inclusion when evaluating their prospective employers. Their first experience of your business – the interview – must therefore display your commitment to equality, diversity, and inclusion.
5 – Compensation must be competitive
Glassdoor data shows that, in 2017, 45% of employees changed jobs due to salary-related reasons, and a different Glassdoor study from the same year found that, on average, a 10% increase in pay increased retention by 1.5%.
Equally, while older employees value meaning, the ability to contribute ideas, and learning opportunities, many – women in particular, according to the Centre for Aging Better’s 2017 study – are more willing to leave an employer if their pay levels are low.
As such, it’s crucial that you make sure compensation levels are fair and competitive. To guarantee this, ensure compensation:
– is tied to performance and employee targets via well-planned appraisals
– accounts for industry standards – using online salary checkers, for instance
– is also provided via company benefits – cycle to work schemes, travel season ticket loans
– is not influenced by gender, race, disability, or any other diversity marker.
There are countless employee retention strategies organisations can utilise to reduce turnover and get the most out of the best talent. Get in touch with our team today and let us take a tailored look at your workforce, what drives them, and what will ensure they stay in your business – or view more about our talent management consultancy services.
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