Struggling with Employee Retention? Here’s Why Today’s Employees Leave and Why They Stay

If you’re wondering how to retain employees, you’re not alone. Employee retention is proving especially challenging for today’s employers, many of which are still working to readjust to the realities of the post-COVID workplace. According to a survey by Express Employment Professionals, 35% of Canadian companies say that employee turnover has increased compared to 2021 — and signs point to further retention issues ahead. In recent research by Robert Half, 50% of Canadian employees indicated that they are either looking for a new job or plan to begin a job search in the first half of 2023.

Turnover has always been an expensive prospect. Depending on the role and seniority, replacing a lost employee can require anywhere from 30% to 150% of the employee’s annual salary in recruitment, new hire training, and associated costs. The current challenges in attracting and recruiting qualified talent can make increased turnover rates an even more daunting prospect. Yet this situation also presents an opportunity to better understand the needs of your unique workforce, and create a robust strategy to attract and retain talent in the months and years ahead.

Why are employees leaving?

When considering how to retain employees, it’s important to first understand the causes of attrition within your organization. Canadian results from Indeed’s 2022 Job Search Survey show that employed job seekers are often seeking higher pay (31%), better benefits (20%), to change or grow their career path (20%), a more flexible schedule (13%), and more belonging in the workplace (12%), among other responses.

In assessing your unique retention challenges, it’s important to do more than just review the results of recent exit interviews. Try proactively reaching out to your employees with surveys or other feedback forums to identify the varied factors that might be causing them to pursue other job opportunities. This enables you to diagnose and potentially address issues before your best employees have accepted a competitor’s offer.

Fundamental challenges to employee retention

Today, many employees are experiencing fundamental challenges with their employment — issues that are actively pushing them to seek a new job. These often include:

• Low or unfair compensation: with inflation, interest rates, and everyday costs on the rise, many employees are feeling the pinch. In Indeed’s Job Search Survey, higher pay and better benefits topped the list of reasons employed Canadian job seekers are looking for new work. What was a competitive compensation package a few years ago may no longer be sufficient to attract or retain talent. As pay transparency increases, employees are also gaining a better understanding of their value — and even uncovering inequitable pay gaps.
• Stress and burnout: the pandemic workplace created a “pressure cooker” environment from which many employees have not recovered. A research study commissioned by Workplace Strategies for Mental Health revealed that one in three Canadian workers currently feels burned out — and rates are considerably higher in industries like healthcare, childcare, insurance, and finance. Employers that do not create a plan to actively address employee burnout risk significant turnover.
• Management issues: In Indeed’s research, 12% of Canadian respondents were seeking a new job because they wanted a “better manager”. While there are plenty of suggestions about how employees can help mitigate the impact of a bad boss, employers must realize that toxic leadership can undermine all other efforts to create a positive, inclusive workplace. This is especially true in cases of discrimination or harassment.

Creating a workplace that encourages retention

Even during the “Great Resignation”, it’s important to remember that today’s employees are looking for more than pay. In addition to addressing issues that may push employees away, look to create an environment that encourages people to stay by:

• Creating opportunities for career growth: according to recent global research on talent mobility, 73% of surveyed workers wanted to know about career advancement opportunities within their organization. Such opportunities could include vertical career progression, such as promotion or advancement toward a leadership role, or lateral progression, where an employee is able to apply their skills to a new group, project, or challenge. In contrast, workers who lack visibility into career opportunities within the organization are 61% more likely to seek employment elsewhere. Consider developing a robust internal talent mobility strategy that encourages employees to pursue new opportunities and take on different challenges without leaving the organization.
• Prioritizing employee happiness and wellbeing: Indeed’s research shows that 74% of job seekers say workplace happiness is important when considering a new position — and if your employees are happy, they’re more likely to stay. While many workers are seeking employment options that provide greater flexibility, such as remote or hybrid schedules, employers need to ensure such work arrangements don’t prioritize productivity over mental health.
• Ensuring alignment with employer branding: it can be challenging to overcome mismatches between employer branding and the employee’s lived experience in the workplace. If your organization is experiencing a spike in employee attrition, assess whether the company is truly delivering on its Employee Value Proposition (EVP), and use insights from current employer branding metrics to identify specific areas for improvement.
• Building community: greater belonging in the workplace was a priority for 12% of employed job seekers in Indeed’s study. Even in remote or hybrid working situations, it’s important for employees to feel connected to their co-workers. Consider ways to build a sense of community, regardless of employee location, such as through improved communications tools, creating shared experiences, or regular company get-togethers. Another approach is the development of a mentorship program, which supports career growth in addition to creating cross-functional relationships throughout the organization.

Transforming retention challenges

While unchecked employee turnover can be a sign of potential issues, retention challenges can also provide an opportunity to rethink, redevelop, and refine an employer brand that truly meets the needs of your workforce. With a tailored employee retention strategy built from honest feedback, organizations can create a workplace that creates a competitive advantage in the talent marketplace.