- Employee retention facts you must know
- Employee retention trends in different companies
- How do companies use employee retention analytics to improve retention rates?
As a business in the corporate world, you know how important employees are and how important it is to keep them happy and content. However, this is easier said than done. Employee retention in India is not easy, more so because we have so many startups that are backed by renowned investors springing up every other day. So, in order to retain your employees, you need to first listen to them. You need to show them that you want them to continue working with you. You need to take them into confidence that you are willing to do everything to keep them. But, there are not many companies in India that are ready to go that extra mile. They don’t understand how important employee retention is to their long-term success. No wonder a lot of businesses have to shut their doors even before they start to find their footing.
All is still not lost. There are ways that can help businesses in turning the tide in their favour. The biggest thing that businesses need to show is that they value their employees and that they are ready to do everything that is required to reward them. Best companies are those that don’t give their employees any reason to look elsewhere. If you are willing to respond to your employee demands, those that are justified, you will have little problem in retaining them. You need to understand that no employee wants to leave a good employer. It is only when an employer pays no heed to heed to an employee’s demands that they start looking out for other opportunities.
You can’t get caught off guard as an employer. You need to always stay ahead of the trends. Let us now set the context straight. Let’s put before you employee retention trends and statistics that will help you better understand your workforce perception and come up with an actionable plan to not let your performers drift away.
What are some employee retention facts you should know?
The things you need to do to keep great employees or stop that from leaving can be unsolved mysteries if you are not aware of your company work culture, or if you are still building on your business. We are going to put before you a few surprising facts and then discuss employee retention analytics based on those.
- Forbes studied a number of surveys done recently in India to understand employee retention KPIs. What it found out was unexpected, to say the least. The cumulative study of these surveys revealed that over 50% of Indian employees are considering leaving their jobs. Out of these, more than 65% of the employees belonged to the below 25 years age bracket. These figures aren’t too promising in today’s India where the startup revolution is at its peak. Now, startups are looking for young talents, but only those that are willing to stick with them for a few years. And well, they have their work cut out. Investors don’t put money on businesses that see high attrition.
- HireRight published its India Employment Screening Benchmark Report 2018 to give employers valuable insights into how employee retention works. The report featured a survey that gained inputs from 6,000 HR professionals. We are only going to talk about the biggest takeaways of this report here. 85% of Indian organizations were considering hiring more people. This figure for the entire APAC region was 77%. So, Indian companies seemed more intent on freshening up their teams than their counterparts in the Asia Pacific region. Another important finding was related to hiring expectation and employee retention. Nearly half of the companies that were spoken to during the surveys pointed towards investing more money in retaining their staff. This figure is more than double of what it was when the survey was last conducted in 2017.
- Finding a fitting replacement for an existing employee that could leave you is a big investment, both in terms of cost and time. A lot of time and money goes into finding the right talent for your needs. You need to advertise vacancies, get in touch with recruitment agencies, screen and interview the candidates, and then finally hire a candidate. Onboarding is another important part of the process. A study by Employee Benefits News reveals that when a company loses an employee, it bears a loss that is equivalent to nearly one-third of that employee’s annual salary. So, when an employee leaves you, it isn’t just a resource that you no more have access to, it is as much the cost associated with it. The easiest way to do away with these concerns is to retain your employees by providing them enough reasons to stay loyal.
- Employees that perform want to be recognised for their efforts. If they aren’t recognised or rewarded, they are highly likely to look out for a new job. According to data released by TINYpulse, only 12.4% of employees that are recognised for their efforts start looking for a job whereas 21.5% of employees that aren’t recognised prefer switching their job to a better option than continuing in their current company. If employees get validation for their work, they are more than willing to stay. Employees that are appreciated by their managers are far more likely to continue with a company than ones that are seldom acknowledged. Similarly, employees who are assisted by their managers in managing their workload are more likely to stay. According to TINYpulse, only 13% of employees who receive regular recognition from their managers look for a change in employer. The figure stands at 24% for the employees who think they don’t receive recognition regularly enough from their managers.
- Employers that don’t pay too attention to the work-life balance of their employees, pay the ultimate price by losing them. It has been found that employees that value their personal life as much as they value their professional life are likely to stay with a company that helps them in maintaining this balance. In a study conducted by Kronos, it was revealed that 95% of HR leaders agree to the fact that employee burnout is seriously hampering retention. Whether or not they are allowed to work remotely on some days or in certain situations and whether or not their work hours are flexible are factors that employees consider when choosing to stay or move on. Let your employees maintain a work-life balance and focus as much on their personal lives as they do on their professional lives. You will start seeing great results very soon.
Employers that empower their employees give them another reason to stay. According to TINYpulse, employees who have complete control of their professional careers have a 20% higher chance of staying with their existing company. Employees that are clear about the direction their career is taking, and are aware of the support and guidance from their leadership, are more loyal.
Employee retention trends in different companies
Well, you need to understand that there is a lot common between employee retention and being a company that everyone wants to work for. Let’s take a look at some companies that have done really well in keeping employees happy. Future Magazine named Google as the best company to work for, again. It is the sixth consecutive year that Google has topped this list. Its attrition rates are not as high considering the huge size of its human capital.
So, what does Google or Facebook for that matter do to keep employees happy? They employ a set of straightforward strategies to not let their employees run out of the door, if you like. One of the things that hiring managers at Google or Facebook do is take their time when hiring a candidate for a role. A big reason that people want to leave your company is because they don’t fit the job profile or role. Hiring done in haste often leads to repeated training and manager-employee frustration among other things.
It is very important to have a hiring plan in place that mentions the required qualification, skill set, experience, and other things that a hiring manager needs to look for before giving a candidate a heads-up. Google posts about 5,000 jobs every year. Over two million candidates apply for these. However, Google gets its hiring right every time of asking because it follows an exhaustive recruitment process.
Give it a read: Complete guide to employee retention
How do companies use employee retention analytics to improve retention rates?
Let’s take you back to the first quarter of FY 2019-2020 and see what top IT companies had posted regarding their attrition rates in that period. Cognizant reported a jump of 4% from 19% in the last quarter of the previous financial year. Infosys reported an increase of 3 % from its attrition rate of 20.4% in the period from January-March 2019. Wipro did comparatively better than its counterparts in this regard. Its attrition rate saw a jump of only 1% in the last 1-1.5 years. What did Wipro do that the others couldn’t?
This is what data analysis and employee retention all about. You work on the previous data and try to bring in reforms to make your employees stay. So what Wipro did was it brought out certain initiatives to reward performing employees. At the same time, it started reskilling its employees. It had learnt its lessons. That’s why it gave its junior level employees a retention bonus of Rs.1 lakh. That’s how it was able to retain its employees. It wasn’t doing as well in terms of retention about 18 months from when these figures were reported in the first quarter of FY 2019-2020.
This is what Ayaskant Sarangi, Senior VP (HR), Wipro had to say about these employee retention efforts, “We recognize the contribution of high performers by offering them better opportunities and substantially higher increases. They are rewarded with promotions and managerial roles where they are entrusted with team-leading responsibilities. We also offer them opportunities in client-facing roles.”
Infosys is also learning to make better use of employee retention analytics after the period of its well-documented struggle with keeping employees. According to Salil Parekh, CEO and MD, Infosys, the company has formed a task force, which will be working under COO, Pravin Rao, to turn its retention situation around. The task force will be responsible for preparing a list of actions, which will be put to work in the next few quarters.
Cognizant also learnt from its mistakes and was quick to make amends by setting up a transformation office for reviewing factors that can help them in improving upon their employee retention rates. It has upskilled and reskilled nearly 150,000 employees in the last year or so. It also released retention rewards worth $48 million to not allow great talent to leave.
Also read: Top 9 employee retention strategies
Many companies pay all the attention to their bottom line, in order to maximise their growth. However, there are other things as well that need as much attention, if not more. These companies need to realise that the most important asset of their businesses are their employees. Employees that work with all honesty to achieve the goals set by a company can ensure long-term success. So, need to focus on employing employee-first approaches to retain their best resources.