According to different studies, the turnover rate for UK companies is between 15% and 35%. Turnover, or churn, is the number of people who leave a company in a given year. As you can surmise, churn can be expensive for businesses due to lost productivity and the costs of hiring new employees.
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Businesses have traditionally done several things to stop churn and retain their best employees. These include hiring candidates with the best demonstrated abilities on their resumes created with the best English CV templates and offering better benefits than their competitors. These traditional options have not always worked, so many businesses are turning to different solutions to solve this issue.
The Evolving Employees Mindset
A reason for such high churn and employee dissatisfaction is changing employee mindsets. Millennials and younger workers are not satisfied with feeling like cogs in the proverbial machine. This is particularly true for individuals who feel their employers do not prioritise their well-being as they should.
A typical area of contention is work-life integration and balance. Many young people feel they should have a life outside their jobs, and they are not prepared to work for companies that do not offer them this.
Many are also concerned about career growth and seeking new opportunities, so they are more likely to switch companies or positions when new opportunities arise.
Then, there are the interrelated issues of flexibility, autonomy, and mental health considerations. According to a Mental Health UK report, about half of respondents said mental health is crucial when choosing a workplace or employer.
Why Traditional Retention Strategies Fall Short
As many employers will tell you, employee retention has changed. This has left many traditional approaches to this issue ineffective in today’s highly dynamic workplaces. Companies still employing these conventional retention strategies are quickly discovering they no longer apply to modern workforces.
A good example of such a strategy is the annual performance review. This used to be a cornerstone of employee development. These yearly assessments were tied to standardised raises and promotions. However, they now feel outdated in an age where employees seek continuous feedback and real-time growth opportunities.
Some employers have also not realised standard benefit packages no longer apply. Having retirement plans and health insurance are great perks, but many people feel they do not address the needs of today’s employees. Younger people value mental health support, flexibility, and personal development opportunities, benefits and perks they value much more highly than what companies traditionally offer.
Then, there is the issue of the linear career path. In the past, one had to “climb the ladder” to enter a managerial or leadership position. This is no longer appealing to employees who now desire more diverse experiences and skill development across different areas.
The Changing Business Environment
One of the greatest shifts in how people work happened during the COVID era, when remote work became the norm for many people. It transformed expectations around workplace flexibility and autonomy, and made rigid schedules and mandatory office presence increasingly unpopular.
Things became even trickier for businesses due to competition from the gig economy. This work paradigm raised the bar further by offering workers unprecedented flexibility and autonomy. For this reason, traditional employers must now compete not only with other companies and their competitors but also with new business models.
This is in addition to dealing with technological advancements. The pace of digital transformation has accelerated skills obsolescence, making continuous learning and development crucial for both employee engagement and organisational success.
All these are challenges businesses must overcome, failure to which they risk losing their best employees.
New Models for Employee Retention
With all the above issues to keep track of, companies have started developing new models for employee retention. One of this model’s pillars is personalised growth plans. Many businesses are now developing individual career progression and development plans for all their employees. They are doing this with the help of artificial intelligence and machine learning plus the data they have on their employees.
Skill-based and cross-training opportunities are another way these businesses are fighting for their best employees. Employees are promoted based on their skills or the business gives them resources to learn the skills they need to advance their careers.
Providing cross-training opportunities is another great way for businesses to ensure well-rounded and highly-trained employees. The reason this happens is that employees can learn different skills from professionals in different departments.
Providing Workplace Flexibility
There has been a lot of pushback against remote work, with Forbes reporting that up to 70% of companies say they will not allow remote work in 2025. That said, this is not a good strategy because companies like Amazon that have tried this have seen employees leave and have had to reverse this decision.
The likely outcome is that employers will have to provide hybrid options. These options allow employers to come into the office a few times a week or month while doing most of their work at home.
Another area of flexibility is in how businesses evaluate employees. Businesses are realising that people are different, so they need to assess them differently. Result-based evaluations are becoming the norm, with employees judging based on the results they produce for their companies instead of other metrics like how many hours they spend in the office.
Mental Health and Wellbeing
Another retention pillar, especially among young people, is mental health and wellbeing resources and facilities. Younger people are more attuned to their mental health and now demand accommodations for any mental health issues they may have. Many are leaving employers who do not have mental health and well-being as a priority.
This means that employers who want to retain the best young employees must provide mental health resources. These can include education, benefits, insurance, and other facilities to aid with this.
Employee churn is not new, but we have seen it surge in recent years. This is especially true for younger people, who now demand much more from their employers than older people do. If employers want to retain these employees, they have to learn what did not work in the past and what might work now and in the future to implement the latter.
