Top 5 Things That Are Bugging Your Employees And How They Directly Affect Your Retention Rate

Are you interested in discovering your employee’s most serious complaints?  Knowing what makes employees unhappy is half the battle when you think about employee retention, work satisfaction, morale, and motivation.

Organizational issues such as training time and investment; lost knowledge; insecure coworkers that are left behind and an expensive replacement candidate search is costly. Various estimates suggest that losing a middle manager costs an organization up to 100% - 200% of the individual’s salary.

Employee retention is critically important for a second reason.  Over the next few years while Baby Boomers (ages 40 to 58) retire, the upcoming Generation X population numbers 44 million people (ages 25-34), compared to 76 million Baby Boomers available for work.  Simply stated:  there are going to be a lot fewer people to work in an already challenging talent landscape.

From my experience I have learned that the list below are the top 5 reasons why employees leave companies or causes them to peer over the fence to see if the grass is really greener.

  1. Lack of Clarity from Management – People leave managers more often than they leave companies.  It is not enough that the manager is well liked or a nice person.  Managers need to set clear expectations for each employee. There has to be clarity about job expectations, earning potential, performance feedback, and a framework which the employee perceives they can succeed.  When all these items are in place, it gives employees hope for a brighter future and a desire to do more for the company.
  1. Cultures That Do Not Encourage Open and Honest Communication – Does your organization solicit ideas and provide an environment in which people are comfortable providing feedback?  If so, employees will offer up ideas, feel free to criticize and commit to continuous improvement.  If not, they bite their tongues or find themselves constantly in trouble – until they leave. 
  1. Internal Pay Equity – Employees are quite concerned about pay compression, the differential in pay between new and longer term employees.  In organizations, with the average annual pay increase for employees around 3%-4%, employees perceive that newcomers are paid better – and often they are because the renewed hiring boom is making it increasingly more difficult to find great candidates and stay competitive.
  1. Mediocre Benefit Programs – Most employees feel their health insurance costs too much, especially prescription drug programs, when employers pass part of the rising costs to employees.  That is when health/dental insurance, retirement and Paid Time Off plans can make a difference to an employee when they are considering the pros and cons of staying at your company.
  1. Human Resource Department Response to Employees – HR Departments need to be more responsive to employee questions and concerns. In many companies, HR is perceived as policy making, policing arm of management.  In forward thinking HR departments, responsiveness to employees needs is one of their cornerstones which can make or break someone’s career.

The desire to leave, or the temptation to do so, is at the heart of the problem. You can pay people to do a piece of the work but that does not automatically buy passion or loyalty.

A PowerPoint presentation in the boardroom will not remove the problem of people retention.  Success has to do more with the each line manager and how they engage and develop their employees.  This attitude must start at the very top of the organization and be projected and persistently pursued.

Ultimately, these issues are not that complex and can be overcome.  During my daily work as an executive coach I am convinced that there is huge potential and great opportunities for every business leader to conquer these challenges.




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This entry was posted in Blog and tagged . Posted on May 27th, 2014 by Judy Hogel