In a buoyant jobs market, firms need to take a holistic approach to retention

With candidates holding all the cards in a turbulent hiring pool, Lynn Smith explains why employers should be working harder to hold on to valuable staff

In a buoyant jobs market, firms need to take a holistic approach to retention

For all the various ways Covid-19 disrupted our way of life, it’s hard to fathom that the first official case in the UK was only recorded on 29 January 2020. In the space of less than two years, drastic changes to how we live our lives brought the things that are really important into razor-sharp focus. It also proved that long-established structures of work could be challenged and recalibrated. Being office-based all the time wasn’t as necessary as we had once thought. 

Though the unique buzz of office life was missed by many, the shift to working from home (WFH) and the precious time it returned to employees was deeply appreciated. Few have been keen to return to the pre-Covid, office-based nine-to-five regime and where they’ve been forced to, have responded by handing in their notice. Such is the scale of professionals taking this route, the exodus has been predicted to cost the UK and Irish economies almost £17bn and has even merited its own name: the ‘Great Resignation’. 

The phenomenon has created an unprecedented number of job vacancies that employers are desperately trying to fill. Indeed, between May and July 2021, the Office for National Statistics (ONS) estimated that there were 953,000 vacancies: the highest figure since records began in 2001.

The ‘Great Resignation’ has created a seller’s market 

The combination of severe economic disruption and a sudden shift to WFH froze the employment market. Redundancies spiked and recruiters stopped recruiting.

As the economy now enters recovery mode, employers are returning to full functionality. They’re beginning to grow once again and are looking for people to sustain that growth. Employees, whether in or out of work, have more options and it’s creating pressure on businesses to retain the people they have.

Staff retention is a key metric businesses use to measure success, and with good reason. Not only is it a key indicator of the effectiveness of a business’s culture, it must be closely monitored because recruitment is expensive and risky, and more so when it is frequent. Indeed, according to research by Personio and Opinium, the average cost of a continued talent exodus per business could stand at more than £10,000.

WFH may have democratised the talent pool employers can access, but with control currently in the hands of candidates, they have also had to enhance their salaries and benefits to secure appointments. Where talent is acquired, there is then the nervy period during which a new hire’s ability to perform and align with a brand’s culture and vision is unproven. 

Retaining your people in the modern world 

A convenient (if not lazy) assumption for many employers losing staff is that their people have left for more money. The truth is the promise of a higher salary tends only to be one factor among many. A worsening work/life balance and toxic workplace culture are just as likely to trigger a resignation as issues surrounding pay. 

The fact that other factors play such a dominant role in an employee’s decision to resign may seem to complicate the problem for employers, but it doesn’t have to. With a smart revamp of a business’s culture, staff retention can be significantly strengthened. And it begins by looking at your people not just as assets, but as individuals. 

A holistic approach should be grounded in empathy 

Such has been the focus in recent years on productivity and satisfying the demands of shareholders, the very idea of taking a more empathetic approach to employees has often been dismissed, even scoffed at. They are attitudes partly borne out of a ‘masculine’ dominance in corporate environments that pays little heed to the person behind the job title. Unchecked, this can easily lead to toxicity – a major trigger of resignations.  

Intelligently introducing a more ‘feminine’ influence will not dilute expectations on productivity, rather they will allow both insight into employee attitudes towards the business and opportunities to deliver empowerment. 

For example, many businesses still rely on annual surveys to find out how their employees feel about their work. Not only is asking these questions once a year nowhere near sufficient, but they are usually anonymous, and findings are rarely and adequately acted upon. 

A much more effective methodology is to conduct regular ‘stay’ interviews where employees are interviewed on the reasons they choose to remain with a business. This builds a much clearer picture of what a business is and isn’t doing well and employees feel valued by even being asked the questions. 

Whether it’s through stay interviews or any other mechanism, opening dialogue with employees is an important step towards building better relationships between the workforce and line managers. A recent Gallup poll of more than one million US workers found that the main reason people quit their jobs is because of poor relationships with bosses or immediate supervisors. And three-quarters (75 per cent) of workers who resigned from positions did so because of line managers rather than the position itself.

Retention for recovery 

Perhaps a cliché, but a business’s greatest asset really is its people. Failing to demonstrate a more intimate level of care towards employees can easily elicit a torrent of negative outcomes with poor staff retention sitting close to the top.

Those businesses yet to modernise in line with post-pandemic employee expectations may not realise the detrimental impact of their inaction until they find themselves conducting a flurry of exit interviews. 

The time for change is now. By prioritising their employees and taking a more understanding, attentive approach to people management, employers have time to experience the ‘Great Resignation’ as witnesses rather than as casualties. To build a business that is happier, more outcomes-driven, and – crucially – at which good people remain.

Lynn Smith is chief people and operations officer at MyEva