The Art of Retaining Talented Employees Reduces Staff Turnover by 80%

Many businesses are currently facing the challenging HR problem of mass job-hopping among employees. This brain drain phenomenon requires managers to have an effective employee retention strategy to avoid losing talent. The art of retaining talented employees that 1Office shares with you in the following article will help administrators thoroughly solve the problem of employee turnover.

1. Why is employee retention important?

Human resources are an organization’s most valuable asset. Therefore, failing to utilize them properly can easily lead to a waste of resources and a decrease in work efficiency by up to 200%. Many leaders simply think that when an employee leaves, they just need to find a new person and train them from scratch. This is actually an alarming brain drain phenomenon. The situation of employees leaving the company can bring about many consequences, such as:

• Costs of recruiting and training new employees

An employee job-hopping means you will have to find a completely new person to fill the vacancy they leave behind. Research by CAP (Center for American Progress) has shown that the average cost to replace an employee who leaves is 16% of the annual salary for low-wage jobs, 20% for mid-range positions, and up to 213% for high-level executive positions. It can be said that recruiting new employees is quite costly compared to the expense of retaining an employee who already has experience.

• Losing a team of senior and experienced employees

Employees who leave, especially those with seniority, are often the ones who understand the company very well. This is because they have had a long time being exposed to and familiar with the operational methods as well as the vision and goals that the organization pursues. Therefore, they are the ones who can bring a lot of value to the business. Losing this core team of personnel can lead to a decline in the company’s development and competitive capacity.

• Causing uncertainty for those who stay

When resignations occur too frequently within an organization, the remaining employees will start to have doubts and ask questions such as: is the company really treating its employees well, what is going on? The loss of trust and morale among employees will greatly affect the company’s performance, and a Domino effect could even encourage the remaining employees to consider leaving.

See more: 10 master tips to boost employee morale

2. The state of employee turnover in businesses

The actual figures have raised many concerns about the wave of job-hopping and have made many leaders more aware of the importance of employee retention. Specifically, a report from McKinsey and Co surveying over 13,000 employees worldwide shows that:

• Over 4 million people job-hopped each month in 2022 – and this trend shows no signs of stopping.
• About 40% of workers are considering leaving their current jobs in the next 3 to 6 months.
• Some sectors are experiencing a brain drain crisis: More than 60% of workers have job-hopped in the consumer/retail and finance/insurance sectors. 54% of workers have left the healthcare and education sectors.

These numbers indicate the urgency of having an employee retention policy in businesses if directors and senior managers do not want their organizations to lose talent.

>> See now: Important HR policies according to corporate standards – how to build them effectively

3. 7 Effective strategies for retaining talented employees in your business

So how can we solve and prevent the aforementioned problems? The way to retain talented employees goes beyond just methods and actions. It is the art of managing people and a long-term strategy for nurturing talent within the organization. Let’s explore the following effective strategies for employee retention and apply them flexibly to your organization:

3.1. Empower employees

No employee likes the feeling of being constrained or overly supervised at work, as this can easily create stress and pressure. Conversely, when employees have autonomy in their work and a voice in the organization, they will feel more responsible and more connected to the company.

Give employees the authority, space, and resources to complete their work, and give them the right to contribute their opinions in company meetings. When they are in a proactive position, they will feel more satisfied with the organization and their job, and their level of commitment will be strengthened and enhanced as a result.

3.2. Recognize and reward

Do not overlook recognition and reward systems for employees if you don’t want them to leave the organization. Being recognized and rewarded for their achievements makes employees feel valued and that all their efforts are worthwhile. This is an invisible bond that helps connect and retain talent, as well as maintain their motivation to work and commit to the company long-term.

To accurately recognize employee performance, managers need to build a set of performance evaluation criteria. There are many methods that businesses can currently apply to manage employee performance, such as:

• KPIs, OKRs
• Using the Balanced Scorecard (BSC)
• 360-degree feedback
• Using employee evaluation software

You can flexibly apply various methods, but the key to building a performance evaluation framework is to provide guidance for employees on what they need to do to achieve their goals.

>> See more: 11 popular methods for evaluating employee work performance

3.3. Offer competitive salaries

Salary is still a sensitive topic that causes much debate whenever it is mentioned as a reason for employees leaving. However, the importance of money in retaining employees cannot be denied. After all, when they have contributed and created value for the company, they also want to receive the value they deserve. Therefore, building a competitive and transparent salary structure is essential if you want to retain talented employees.

You can apply salary structures that match employee capabilities using the 3P salary formula. This means paying based on Position, Person (competency), and Performance.

Additionally, it is important to conduct regular salary reviews for employees to give them more reasons to stay and contribute to the organization.

3.4. Care for the material and spiritual well-being of employees

Besides salary and bonuses, caring for employees’ well-being is another factor businesses need to focus on to build employee engagement. Helping employees achieve a work-life balance will create the most favorable conditions for them to improve productivity, increase satisfaction, and strengthen their loyalty to the organization.

To achieve this, you need to diversify employee benefit policies to give them a solid foundation and peace of mind at work. Some policies include:

• Ensuring full allowances for employees.
• Providing sufficient leave time for employees to “recharge”.
• Organizing regular health check-ups for all personnel.
• Providing benefits for employees’ children and family members.

4.5. Create opportunities for employee development

Ambitious employees never want to stand still and be content with their current results. Therefore, to retain talented employees, you must create every possible opportunity for them to learn, develop, and train.

Some strategies businesses can apply to develop human resources include:

• Rotating personnel to other departments or branches.
• Promoting employees for special projects.
• Sending personnel to participate in talent development programs.

Besides, building a clear career path is necessary to show employees the opportunities they can achieve.

3.6. Build a healthy environment

A healthy, impartial, and fair competitive work environment will “awaken” employees’ motivation, giving them the opportunity to reveal their abilities and express themselves.

An ideal work environment will be based on these factors:

• Space: An open space that encourages creativity, with forms of relaxation after work.
• People: A manager with heart and vision, friendly colleagues who help each other progress.

Building and correctly applying HR policies will help the business operate effectively, and personnel will become more attached to the organization.

3.7. Apply flexible management

Have you ever heard of the term “agile management”? Although this concept is still quite unfamiliar to businesses in Vietnam, “agile management” is becoming a leading trend in the human resource management industry worldwide.

So how do you apply the agile management method to retain employees? All you need to do is:

• Create opportunities for exploration: Allow personnel to freely create new methods and take risks to innovate.
• Encourage development: Managers only provide the conditions and tools for work. Employees will learn and develop necessary skills throughout the process.
• Create motivation: Provide a vision, goals, and factors that impact employee motivation.

5. Applying HRM to build the most optimal employee retention strategy

Today’s labor market is competing every minute of every hour to attract talent. A moment of negligence can cause talented employees to be snapped up by competitors. Therefore, simply applying employee retention strategies is not enough; it’s necessary to apply advanced technology to standardize and optimize this process.

With the desire to create the best experience for employees and managers, 1Office has developed HRM software – a solution that helps businesses solve the human resource management puzzle.

1Office software will help businesses build a systematic employee retention strategy supported by outstanding features such as:

• Transparent and fair employee performance evaluation through a set of KPIs and OKRs built to fit the company’s standards
• Create payrolls automatically and quickly, and pay salaries directly on the software linked with MB Bank
• Build corporate culture with an internal network – a bridge between employees and managers

Recruiting talented people is difficult, but retaining employees and making them want to stay and contribute to the organization is even harder. However, if you know how to effectively retain talented employees, they will voluntarily stay with the company. Our article above has provided you with the art of effective employee retention and a technology solution to help businesses build a systematic employee retention strategy.

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