Finding good talent is one thing, but retaining them is a whole other battle. According to a 2022 report from RMIT Online and Deloitte, over half of Australian workers, about 56 per cent, are taking steps to change their current employment. Considering that the typical onboarding process costs a business $150,000 – split across advertising, recruitment, training and lost productivity – this represents a huge challenge for businesses, especially in a tight labour market.
It’s no secret that employers across Australia are struggling to find great people with the right skills. In some industries, such as Technology, big companies are raising salaries to attract talent and making it even harder for smaller businesses and startups to hire.
The million dollar question, of course, is: why? Why do people choose to leave their work, and how can we encourage them to stick around?
Let’s look at a few factors that could lead to your best people quitting in 2023.
One of the most popular reasons for attrition is money, especially in times of high inflation, when global economies are feeling the pinch. Last year, according to an RMIT Online survey, 85 per cent of workers said they were worried about the spiralling cost of living, and that one third had already moved jobs in the last 12 months. Of those that jumped ship, 28 per cent left their organisation for as little as $5,000. 61 per cent moved for less than $10,000. Unfortunately, this sort wage-driven attrition is more likely to hit your most talented, qualified workers, who can command higher salaries on the open market.
The obvious solution is to offer your best staff more money, but this isn’t always feasible for SMEs and small businesses. The good news is, there are other factors that can impact retention, and many of them aren’t dependant on the size of your budget.
The recruitment buzzword for 2023? It’s probably ‘Conscious Quitting’. That’s when employees leave organisations whose values, they feel, don’t align with their own. Conscious quitting is especially prevalent among younger workers, and often comes back to your company’s ESG policies and track record on sustainability. In fact, UK data shows that more than a third of employees are willing to walk out of their job if their employer does little or nothing to fight climate change.
It’s not all about environmental factors, of course. Your values could be equality, diversity, philanthropy etc. The important thing is to communicate these values and then actually live them. Research from Deloitte shows that purpose-driven brands grow three times faster, on average, than the competition; they’re also more likely to hold onto their staff.
Of all the ways to keep employees, quality training is one of the most effective. Some studies suggest that training increases employee retention by up to 18 per cent, and this tallies with our own research. In fact, data from RMIT Online and Deloitte indicates that more than half of employees would prefer a “learning culture” over a “fun culture”, and that a similar number would take quality training over free lunches. This path works best when you consider several factors. First, the training needs to be consistent, flexible, and of high quality. Second, it should be tailored to employees’ individual career goals. Third, it should be supported or subsidised by the business, both with money and time. If you have all these factors in place, you can put a real dent in your attrition rate, and grow your skills base and bottom line at the same time.
An organisation’s culture is hard to measure on paper. It’s one of those ‘you know it when you see it’ natural phenomena. But just because it’s hard to define doesn’t mean it isn’t valuable. Research shows that a healthy workplace culture can massively impact staff retention, and that talented employees are likely to leave jobs, even high-paying jobs, if the culture fit isn’t right. A toxic workplace culture, in particular, is a huge indicator of attrition: some studies suggest that toxicity is 10 times more powerful than compensation in predicting a company’s attrition rate. In other words, you can throw all the money at talented, well-qualified candidates you like, but if you’re not addressing your culture issues, it won’t matter in the long-term. They’ll eventually walk out the door.
According to RMIT Online research, not feeling valued at work is the primary reason for worker dissatisfaction. 57 per cent of Australian workers listed this as their most important factor, beyond even salary. And because communicating value to employees is (mostly) free, this represents a huge opportunity for businesses. So what are the best ways to make employees feel valued? We’ve touched on a few already – pay rises and quality training – but good communication, regular constructive feedback and flexible work conditions have also been linked to employee satisfaction.
The catch is there’s no real shortcut with this one. The best way to make your employees feel valued is to actually value them, and treat them accordingly. Do that, and you’re much more likely to retain top-end talent in 2023.