What Are the 5 Main Drivers of Employee Retention?
No matter the industry, organizations are experiencing challenges in retaining employees, with 63% of companies saying that keeping employees is harder than hiring them. Employees today, especially Gen Zers who are beginning to make up a large part of the workforce, are no longer willing to remain at a company that they don’t feel invests in them, cares about their professional development, or provides them with a true work-life balance.
In 2022, 63% of employees reported that they left a job the year prior due to inadequate growth opportunities, showing that they are not afraid to move on in order to find something more aligned with their values.
However, organizations can retain their talent by looking at key drivers of employee retention. If committed to change and a possible redesign of their employee experience, companies can find and keep top talent for the long haul.
So, what are the five main drivers of employee retention? Let’s explore each one.
1. Learning and Development
Twenty four percent higher profit margins have been seen for companies that invest in learning and development opportunities for their employees, yet another study found that 76% of employees report that they’re looking for growth opportunities. Despite the potential financial benefits, there remains a large gap between what employees are looking for and what organizations are providing. Where’s the disconnect?
Often, prioritizing Learning and Development (L&D) programs requires an organization-wide culture shift. But L&D doesn’t have to be just training videos and educational opportunities. Todd Tauber, SVP of Strategy at Degreed, a learning and upskilling platform, reminds organizations that everyday learning is just as important. What is everyday learning? It’s reading, watching videos, listening to podcasts, connecting with peers, and other day-to-day experiences that impart skills and knowledge.
To promote all kinds of L&D programs, organizations must give employees the opportunity and time to spend on it. If you can give your employees the opportunity to learn, grow, and develop their skills at your organization, they will feel more invested in your company and be willing to stay and make a positive impact there.
Related reading: Skills: The Metadata of People
2. Career Pathing
According to SHRM, 49% of workers expect their employer to play a part in their career development, and are more committed to staying on the job if they believe their employers are making effective use of their talents and abilities. If you can’t help your employees envision themselves one, two, five, or even ten years down the line still working for your company, you will certainly lose them to another organization.
To retain this talent, you need to offer clear career pathing opportunities that help illuminate an employee’s path at your organization. By offering career pathing opportunities, you can:
Equip employees with visibility and clarity on their growth at your company
Showcase multiple internal career paths and the skills required to get there
Proactively develop talent to realize their potential and meet your business's evolving needs
Make it easier for employees to progress in their career paths and gain new skills through personalized learning and development courses from your LMS or user-generated content
A great way to implement or enhance career pathing at your company is to invest in AI-powered technology. AI can act as a recommendation engine to help employees move closer to their career aspirations by:
Matching candidates to roles they may be interested in using fit-score technology
Finding skills deficits based on employee information and recommending L&D programs to close those gaps
Offering gigs, or short-term projects, in different departments that provide a hands-on learning experience
Employees want to feel recognized and valued, not just for the work they’re doing but for the person they are. Connecting employees with seasoned mentors is a great way to boost retention. A mentor helps create lasting and meaningful relationships, and is a great resource for connecting that employee with L&D programs, Employee Resource Groups (ERGs), gigs, and more.
A great way to kickstart your mentorship program if you don’t have one — or if the one you have needs some work — is to use AI-powered technology to match best-fit mentors and mentees, helping each other grow and evolve in the workplace.
Only 26% of leadership reports that employee engagement and connection is a very important part of what they think about, plan, and do everyday, and only 36% of employees say they feel engaged with their work and workplace. Implementing a mentorship program helps nurture a culture of inclusivity and equity, which in turn boosts retention rates.
Internal gigs, or short-term projects, drive employee retention because they help unleash talent by quickly upskilling, reskilling, and engaging employees — at scale. When you can provide employees with gigs, you are ensuring that your teams are developing the skills needed to thrive and evolve while embracing talent agility and mobilizing employees to tackle important work.
Gigs provide employees with variety, skill development, autonomy, flexibility, recognition, collaboration, networking, and more. Giving employees an entrepreneurial mindset through gigs helps increase innovation, creativity, and problem-solving skills, which can benefit both the employee and the organization. Including related gigs in an employee’s personalized career path is a great way to encourage them to hone their skills. Employees who feel empowered in this way are more likely to stay engaged and committed to the organization.
Related reading: How to Launch an Internal Gig Marketplace
5. Employee Resource Groups
An Employee Resource Group (ERG) is a voluntary, usually employee-led group with the goal to promote connectivity, as well as diversity and inclusion across the organization. ERGs are a great way to drive employee retention for a number of reasons:
Sense of belonging: ERGs create a sense of belonging and community within an organization by bringing together employees who share common backgrounds, experiences, or interests. This fosters a supportive and inclusive environment where employees feel valued and connected. When employees feel a strong sense of belonging, they are more likely to stay with the organization.
Networking opportunities: ERGs provide networking opportunities for employees across different departments or levels, enabling them to build relationships, expand their professional networks, and/or access mentorship programs. By connecting with colleagues who share similar experiences or interests, employees feel more engaged and connected to the organization, increasing their likelihood of staying.
Career & leadership development: ERGs often offer professional development and career advancement opportunities, or the chance to serve on the ERG’s board. They may provide workshops, training sessions, or access to industry events. By investing in their employees' growth and development, ERGs demonstrate the organization's commitment to their success. This support can lead to increased job satisfaction and loyalty, reducing the likelihood of employees seeking opportunities elsewhere.
Diverse perspectives: ERGs celebrate and promote diversity and inclusion. By providing a platform for different perspectives, ERGs contribute to a workplace culture of belonging. This kind of environment fosters innovation, creativity, and collaboration, and employees are more likely to stay in an organization where they feel their unique contributions are valued and appreciated.
Related reading: DEI&B: How to Build a Lasting Culture of Belonging
Implement These Strategies With a Talent Marketplace
If your employee retention strategy needs work and one or all of these factors can help your organization, it may be time to invest in a talent marketplace. With a talent marketplace, your employee information is housed all in one place. It’s essentially an online hub that’s easy to access and navigate for employees as well as hiring managers. Phenom Talent Marketplace, for example, houses learning and development opportunities, career pathing, mentoring, gigs, and ERGs together in one employee resource portal. Through a talent marketplace, you can elevate and retain your greatest source of talent: your employees.
Maggie is a writer at Phenom, bringing you information on all things talent experience. In addition to writing, she enjoys traveling, painting, cooking, and spending time with her family and friends.
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