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Companies currently looking for employees find themselves in a particular dilemma. Although there are many vacancies, they arerather difficult to fill because the labour market is more than stretched right now. At the same time, more and more employees are leaving their companies. Employee attrition is on the rise, while retention rates are falling. The “Great Resignation” is posing significant challenges for employers. Since the covid crisis, an increasing number of people are retiring from work altogether. Today, significantly more employees are quitting on their own initiative than before the pandemic.
Businesses should respond to this situation with targeted retention strategies to ensure they keep their existing employees and thereby reduce the workforce problem – in other words, with employee retention initiatives. Strategic measures for talent attraction and talent acquisition are also recommended. In this blog post, we explain what lies behind this explosive trend of increased employee attrition and how you can take action to combat it.
What is employee attrition?
Employee attrition, also known as employee turnover or employee churn, simply sounds like a cycle of employees coming and going. However, what is meant here is employees leaving a company. There is also a metric for this: the rate of employee attrition is expressed as the percentage of employees who leave the company in a given period. The reason for their departure is irrelevant for this metric.
Nevertheless, it is helpful to know the motives behind employee resignations. Voluntary resignations are especially important for short and medium-term planning measures. Some move to competitors, others to different industries. What’s more, there are people who are now working in non-traditional areas such as the gig economy or as freelancers. Others are also starting businesses – or leaving the workforce altogether (family, time off, etc.). Trends such as changing demographics are also contributing to an increased number of employees leaving organisations.
A variety of factors play a role among ex-employees as substantive reasons for their departure. These include a lack of progression opportunities, a need to improve their work-life balance, poor salary, not enough additional benefits, a lack of recognition and support, a desire for a change, better jobs available at other companies, and dissatisfaction with the job or company. In short, there’s a lot of room for improvement when it comes to employee retention.
How can companies reduce employee attrition?
When devising a strategy for strengthening employee retention, it’s essential that you focus on specific target groups and their particular wishes. You should proceed in a priority-based manner. For example, it’s a good idea to identify particularly important employees and give them due consideration. In addition, employers should also think about how they appear to the outside world and to potential candidates. Talent attraction has an indirect but important correlation to employee retention. If the work at a company is attractive to external candidates, this also has a positive impact on retaining existing employees. Retention measures help attract new employees – and vice versa.
Beyond such approaches, however, companies should also create comprehensive talent acquisition strategies. This way, they create a holistic framework for the employee and candidate environment. This can then also be used to manage the expansion of the talent pool. Initiatives should also target non-traditional workers to engage different groups of people outside the workforce, boost diversity and increase the number of potential candidates.
11 tips on how to slow down employee attrition
How can you improve employee retention by implementing concrete measures? These eleven tips provide you with effective steps that you can implement directly:
Guarantee remuneration in line with the market.
Offer your employees attractive additional benefits (e.g., fitness, courses)
Increase flexibility for your employees: support work-life balance, create remote work options.
Ask for feedback more frequently (performance appraisals). Ensure more regular exchanges and create fixed structures for this. You should do this for efficiency reasons – but also because it contributes to employees feeling appreciated.
Proactively promote the development and training of your employees. Upskilling and reskilling programmes create real opportunities for progression and boost employee satisfaction.
Ensure transparency and fairness in available development options. Consider introducing internal placements.
Nurture a corporate culture – a key pillar of employee retention.
Build an employee engagement strategy. Create structures for communication and cooperation (for example, an employee platform). This also includes feedback opportunities for employees.
Encourage teamwork.
Develop an anti-burnout strategy.
Improve communication. Especially in the age of remote work, productive interaction is more vital than ever before for employees.
From attrition to retention: finding and retaining employees
Against the backdrop of the current challenges on the labour market, initiatives to boost employee retention and loyalty are absolutely essential. However, they alone are not sufficient for a forward-looking human resources approach. They are best embedded in a comprehensive strategy that also incorporates other measures in terms of talent attraction and talent acquisition. In general, with all approaches of this kind, you should really focus on people – and in this case, that means your employees. This holistic approach to internal customer centricity is key in the success of any employee retention initiative.
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