Employment figures for the last decade are alarming. Various statistics dealing with employee life cycles reveal that despite good salaries, stability and conditions, talented employees don’t stay in one company for long. Data from the high-tech industry shows troubling figures – the most disturbing being an average employee life cycle of less than two years:
Facebook 2.02 years
Google 1.90 years
Apple 1.85 years
Amazon 1.84 years
Microsoft 1.81 years
Data from other industries are not very promising either, with a consistent decline in average employee life cycle.
Why is this happening?
One characteristic of our era is a significant reduction in the employee life cycle. This phenomenon was dubbed The Quitting Economy – highly accessible knowledge, candidates and new jobs, multiple job offers and flexible working styles contribute to this trend. In fact, loyalty and organizational commitment are not as popular as they used to be, while the Quitting Economy atmosphere is on the rise. Organizations perceive employees as short-term assets, and therefore employees reinvent themselves as marketing products, ready for the next challenge at any given moment.
The entire labor market is changing in consonance with the younger generations who join it. The Y generation, for example, has unique characteristics that affect the labor market. They distrust the traditional economic systems and in fact take complete responsibility for their economic future. In addition, they understand that hard work will not necessarily bring them financial success, but rather shifting between jobs, ensuring their constant growth and development, while maintaining a balance between leisure and work will be more financially feasible and right for them.
As evidenced by studies, an average Millennial (Y generation) will have worked 5-6 jobs during the first 10 years of their career. Generation X employees did the same in 30 years of career.
Generation Y, who will soon account for 50% of the labor force, are not alone. In the coming years, generation Z employees will also join the labor market. Studies about generation Z employees reveal some interesting trends: 2/3 of this age group will prefer to work as entrepreneurs rather than employees and will seek greater flexibility in their work as well as opportunities to advance and grow into leadership positions.
This may serve to predict that 9-to-5 office positions will grow increasingly irrelevant while remote work and per-project work will become more and more common.
How can you retain employees and generate employee engagement?
Various studies have found five elements that significantly increase employee retention:
Define your company’s added value, make your employees feel connected to that added value, and let them take part in significant activities in the organization. A survey conducted at LinkedIn revealed that employees who have a sense of purpose in their work tend to perform 30% better and remain in their organizations for 5 years or more. Southwest Airlines have formulated a broad vision by which they are not just a transportation company but a company that connects people with their relatives. This vision is easy to relate with and so their employees feel that they are part of something bigger and significant. In addition, they give their employees as much freedom as possible in different aspects of their jobs and allow them to gain experience in professional projects that are not necessarily part of the scope of their position.
#2 Engaged Management
Direct managers are the main driving force for employees. A style of management that’s engaged and meaningful will only emerge out of constant dialogues with employees. Feedback is one of the ways to generate dialogues – among other things, it helps managers to set expectations and generate organizational clarity. Lack of feedback leads to a sense of lack of appreciation, which is the number one cause for employees quitting. It is quite evident that many organizations don’t do enough to promote a culture of discourse and dialogue with appreciation and feedback.
#3 Positive Work Environment
Another important element of a positive work atmosphere is fun – studies have found that employees who enjoy their private lives and their work are more productive. Therefore, it is the managers’ responsibility to create amicable relationships and an atmosphere of fun in their organization. How? Encourage your managers to have honest conversations with employees and ask them to show personal interest; hold organizational events for employees; ask managers to go out to lunch with their teams and do what they can to generate a positive team atmosphere. Encourage social meetings among employees. Remember, having one good friend at work has a tremendous influence on employee satisfaction.
#4 Growth and Development Options
Organizations must own employees’ needs to evolve and grow. Managers should aspire to advance and develop their employees even if they eventually leave for another position or get promoted. How can you do this in a simple manner without formulating fancy career plans?
Generate expertise – 53% of employees say that they have not significantly improved their professional skills in the past year.
Independence – independence allows for experience, errors and success. Lack of independence leads to stagnation in development.
#5 Trusting Leadership
Relationships with direct managers become more and more important. Employees need greater transparency in their work – goals, objectives and prospects. In evidence, various studies show that about one-third of employees feel that their direct manager does not maintain enough regular communication with them. This parameter has a tremendous impact on the employees’ engagement and is very simple to implement. Just talk to your employees and stay connected!
These are the 5 steps of employee retention.
Would you like to significantly improve employee engagement in your organization? Contact us to take your first step!