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Across our latest round of HR Workshops employers have revealed that they face sustained pressure on retention levels into 2024. The competition for skills, particularly to keep pace with the constant evolution of AI and tech challenges, is a key concern for employers. According to our UK Reward Management Survey report from autumn 2023, 53 per cent experienced retention difficulties in 2023 and 50 per cent of respondent employers anticipated these challenges to continue.

Here we outline the five key retention tools and actions that employers can take to increase their employee retention.

1. Take the issue of pay off the table

Employers need to get recognition and reward right. 74 per cent of employers cited that retention challenges are driven by the fact that existing employees are being offered higher salaries elsewhere. Consider the balance of affordability and benchmarking against the wider market to make sure the pay award is set at the right level. As Dan Pink outlines in Drive, while pay is not the sole motivator of people to drive employee engagement, it can actively demote people if they think they are underpaid or unfairly paid for the work they do. Many employers are looking to benchmark both their pay and benefits strategies to ensure they are competitive for the role and the market.

Ensure employees know their package is fair and equitable by communicating the wider reward package. 67 per cent of respondents to our UK Reward Management Survey said they were taking the opportunity to underline the wider investment they make in each employee, to highlight the full value that employees derive from their employer. Salary benchmarking is an objective way to assure employees that they are competitively paid.

Total Reward Statements are an effective way of outlining the full investment employers make in their employees. These can cover the tangible benefits and intangible benefits of working at an organisation – itemising and promoting the uptake of benefits on offer to individuals that deliver true value.

2. Active listening

By genuinely becoming curious about what matters to your employees, listening can unlock quick wins for organisations and help to fortify organisations for long-term success. When employees understand that their views are not only listened to, but that employers take action as a result, this strengthens the employer-employee relationship.

Employees can feel heard and seen when a feedback loop is established, with surveys being followed up and employee opinions being respected. Employee research being actioned, through findings and outcomes being shared, outlined and actioned, builds mutual respect. Building in this accountability through an effective communications strategy enables organisations to steer and target their resources into meaningful changes.

While exit interviews are too late for those leaving, they are a valuable exercise to identify the drivers behind employees’ decisions to leave. 76 per cent of our UK Reward Management Survey respondents are analysing the results of these interviews to mine information about how current processes could be tweaked. This aims to bolster retention with a longer-term outlook, by considering what these insights mean for the organisation today.

3. Employee growth

Career mapping benefits both employees and employers. Employees can clearly see opportunities to progress once this is rolled out across the organisation. This exercise can be led by Line Managers who are equipped with the toolkits to go through this with their teams, which fosters greater focus on long-term career planning. Employees who feel invested in often feel greater allegiance to the organisation who supports their career goals.

However, this strategy also benefits employers. In our UK Reward Management Survey, 82 per cent reported that they faced the challenge of a lack of suitable candidates, and 89 per cent reported labour shortages are driving retention issues. This is supported by the fact that seven in 10 employers across the UK are experiencing a shortage of all types of candidates for their role, according to The Recruitment and Employment Confederation.

Crucially, only 62 per cent of employer respondents to our UK Reward Management Survey said they were ‘sometimes’ or ‘often’ unable to meet career development aspirations of their people. This is a cornerstone of employee retention, as employees need to be able to visualise and understand how they can stay and grow at organisations. Accommodating ambition and progression is fundamental to employee retention strategies.

By offering an environment where continuous learning is actively supported, and people are equipped with the right tools to progress, this will attract and retain the right kind of talent from the outset. Prioritising professional development can nurture ‘home grown talent’, whereby people progress based on skills they acquire during their time at the business, driving down the challenges inherent in the skills shortage facing employers. Upskilling is being prioritised to move people around the business and provide the training they require, as organisations prioritise upskilling their existing employees.

4. Foster inclusivity and a sense of ‘belonging’

Build employee engagement strategies that truly bring to life an inclusive culture. Post-pandemic, it was hard to imagine going back to everyone being in the office every day. Hybrid and flexible working opportunities had also widened talent pools, making sure those who required greater flexibility could be included in the labour market. A robust commitment to equality, diversity and inclusion is an important factor informing the culture of workplaces. Many seek out environments where everyone is valued for their lived experiences and can bring their whole self to work.

However, there has been reports of a new trend of ‘coffee badging’, which refers to employees entering the office building briefly, tapping in to grab a coffee and speak to colleagues, before leaving to work from home for the rest of the day. The new buzz word has been identified as a response to the greater call to spend more time in the office. The drivers behind this range from wanting to ensure more cohesiveness and ‘water cooler’ moments, creating stronger teams, to organisations wanting to make use of the office space more regularly.

According to Charmi Patel, associate professor in international human resource management at Henley Business School, “It’s crucial to address trust issues that may arise between employers and employees concerning productivity. Micromanaging through office attendance monitoring can erode trust. Instead, a culture of accountability and setting clear performance expectations can make all the difference.”

To overcome the challenges associated with a lack of in-person interaction for hybrid teams, dedicated strategy days or designated days when certain teams are in the office are good compromises to create greater flexibility. According to a poll by People Management, more than two thirds of employees would start looking for a new job if they were required to be present in the office more often. To avoid presenteeism, harnessing the power of technology on a daily basis can drive connections, to be supplemented by in-person events. The individual requirements of the team and accommodating their personal commitments is a vital balance for employers to navigate.

5. Prioritise wellbeing and a values-led culture

Supporting wellbeing by encouraging and promoting a work-life balance is a priority for many employees. The pandemic enabled remote working that allowed working parents to be more involved with childcare and balance all facets of their working life. This has resulted in employers increasingly reviewing their employee value proposition – the sum of benefits and promises about their working environment being strong enough to attract and retain the right skills and people.

The employee experience is critical in successful retention strategies. Organisations are increasingly considering how to create a culture that employees want to be part of and thrive in. This includes examining the values of the organisation itself and whether this aligns with those of their people.

Values-led benefits are also increasingly adopted by companies who want their people to choose the benefits that they derive the most value from, such as pay as you earn initiatives and volunteering days. There are also those that recognise the individual and the importance of accommodating the lifetime milestones they are facing, such as leave being extended for fertility treatments or those going through the menopause.

Get in touch

The longevity of employee relationships really depends on the strength of each individual employer and employee relationship. When employers ensure that they are offering pay and benefits packages that successfully balance affordability with being competitive in the market or for particular roles, these should be widely communicated to employees so they understand the true value being offered in the total reward strategy. Once this is taken off of the table by fair and competitive pay being satisfied, this unlocks the competitive benefits of an organisation’s employee value proposition that’s wide in its remit. Those that support the values and wellbeing of their employees, and foster a sense of acceptance and belonging, will build cultures that employees want to stay and join.

Contact us today to discuss how you can bolster your employee retention strategy and ensure that you are offering employees an experience that makes them enjoy working for your company. Register to contribute your views to our upcoming UK Reward Management Survey for spring 2024.

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