How to boost employee retention in 2023 : Retain or Re-train

Introduction

2023 is here and this year, companies are going to chase growth whilst keeping a lean, essential team at the core.

For HR leaders and teams, the priority is not going to be about hiring. Instead, this year, the focus will be about employee retention.

According to a survey by Paycom, one of the world’s leading providers of Human Capital Management (HCM) software — Retention is going to be the number one priority for HR in 2023 (20%), followed by Recruiting (12%) and Company Culture (12%).

You might have set your hiring goals or finalized your talent forecasts for 2023, but it’s also critical to prioritize talent retention on an urgent basis.

Most HR professionals around the world have already set their targets on retaining top talent. Especially the ‘A players’ — because once they depart, the team’s structure could collapse, causing massive loss in productivity and throughput for your company.

Losing your A-players means losing your reliable performers, your top innovators and your most effective problem solvers to competition.

Put simply, they are must-haves for your company’s short and long term success.

In this article, you will learn about identifying your company’s top talent and building a solid retention strategy to keep your A-players from leaving.

Why Build a Talent Retention Strategy?

A report by the Work Institute states that around 70% of the reasons for employees to quit could have been prevented by the employer.

Most people think employee retention is all about saving money and reducing costs.

Yes, it is indeed one of the biggest reasons — in fact, the cost of replacing an individual employee can range from one-half to two times the employee’s annual salary.

But there’s more than just money at stake. There’s intangible losses at stake.

Managerial level exists can break down their team’s morale and cause a dip in productivity. For individual contributors, it could threaten your company’s relationship with customers or partners, or cause loss of brand equity.

Put simply, when top talent leaves a company, you lose more than just numbers on the balance sheet or spreadsheets. You lose momentum, talent and a part of your company’s present and future vision.

This is why HR leaders need to invest in boosting employee engagement and retention.

But how to know the difference between high performers and high potential employees — they might seem the same, yet one is simply good for your company’s bottom line, while the other is a well-rounded, valuable asset to your company.

How to Identify ?

Every company has them but not every company identifies and nurtures them the right way.

Think of your company as a team playing a competitive game — that makes your high performing employees your team’s A–players — they are the scorers, the ones who love what they do and they have a habit of getting things done and adding real value.

A-players have all the special qualities — they have both the performance and the persona to stand out from the crowd.

In order to retain your A-players, you must first identify them.

Here are some subjective ways to gain a clear understanding of who are the top performing employees in your company:

• They act and think like an owner or a role model
• They take ownership and go the extra mile
• They can tackle difficult situations without letting emotions get better of them
• They are quick to adapt to changes and uncertainties
• They seek leadership opportunities and opportunities for growth

In addition to observing the above qualities, HR teams can also conduct 360 degree reviews and interviews to evaluate the performance from various sources such as — team members, subordinates, line managers, direct reportees and customers/partners.

Having right KPIs (Key Performance Indicators) is another objective way to identify an A-player. These metrics can be goal based (quantitative) or satisfaction or service based (qualitative) and can help you give scores or points to employees.

Here are some objective ways to identify and evaluate the performance of your employees:

1. Standard Point based Performance Rating Scale: One of the most commonly used rating methodologies, where employees are rated on a 5 or 10 point scale, or a Likert scale where employees are rated on the basis of agreement or disagreement linked to a set of questions.
2. Custom Performance Rating Calculator: Many organizations use custom built performance calculators where all calculations are done automatically, making the evaluation process more streamlined. The basic components of a rating calculator include -performance goals/KPIs, competencies, and overall summary rating.

P.S. — If you want to dive deep into how to build a tangible performance rating system, then stay tuned for our next article. We will be going through everything you need to know to build a functional, accurate and flexible performance rating system for your company.

Steps to Retain Top Talent

A study reports that in 2023, 35% of people will leave their jobs to work somewhere else — placing companies in massive risk of losing talent to the competition.

This means, offering a competitive salary won’t be enough to retain existing talent.

Instead, top performing HR teams need to build a 360 degree view and offer a range of benefits, all included as part of a positive, high-performance and holistic work culture.

Tangible rewards and intangible benefits combined together can help you retain top talent.

Here are some steps your company can take keep your best employees on board -

1. Prioritize Employee Well-Being

Post pandemic, the focus on physical and mental health has become a talking point for both sides of the conversation, be it the employee or the employer.

Employees that are less stressed are more productive at work. Plus, they feel more connected with the company’s goals and more likely to stay with you for longer.

By giving employees flexible work hours and more control over their work location — employers can support their team’s mental and emotional health. Managers should be supportive in accommodating needs of employees who are caregivers and parents.

Giving mental health days, period leaves and weekly downtime are small steps to encourage employees to focus on their overall well-being.

Further, providing tangible benefits like access to medical insurance, free health-checkups, emotional or psychological counseling sessions, gym or yoga memberships and app-based well-being programs are some ways to invest in physical health.

The employee benefits sector is also growing at a great pace, with innovative solutions emerging such as Pazcare, a Bangalore based startup, which enables companies to provide a fully customizable benefit plan to their employees.

Here are some companies prioritizing physical and mental well-being of employees:

• Ernst & Young (EY), one of the big four consulting firms, offers a free online health assessment facility to its employees. Further, it assists the physical, mental and emotional well-being of its employees up to 25 counseling sessions, including mindfulness training and meditation sessions.
• Asana, a leading SaaS company offers in-house yoga programs and free gym memberships at the company’s office. Employees also enjoy healthy and nutritional meals in the house.
• Accenture, a global tech giant, provides confidential support for various mental ailments and concerns, such as anxiety, stress and depression. Additionally, employees can also seek 24/7 consultation free of cost. The company also offers special discounts and memberships for gyms and fitness centers.
• Nykaa, Delhivery and Shadowfax are some of the leading Indian startups providing customized healthcare plans, including medical, dental and vision camps in the office free of cost to their employees.

Regular communication about the benefits of physical and mental health itself can be a boost to employees seeking support and guidance.

2. Grow with your Employees

A survey by Amazon reported that 89% of employees said that they feel highly motivated to advance their skills.

Offering growth opportunities to A-players is a great way to nurture existing human capital and equip them with the skills they need to succeed.

Companies are using internal upskilling to compensate for the talent shortage and mobilise potential talent to emerge as future leaders.

HR teams should initiate conversations with high performing and high potential employees by asking them about what skills they would like to develop. People want to support their long-term career goals and ambitions — employers should support upskilling of their employees and fund their professional growth.

At Swiggy, employees can get access to premium LinkedIn Learning and UpGrad courses to upskill themselves and advance in their career. Additionally, Swiggy provides an internal coaching program to their tech team to upskill employees.

Some of the ways to execute this can be — provide direct mentorship and guided assistance, offer skill development programs and give access to training and learning resources.

For soft skills upskilling, leadership and management teams can include high performing subordinates in strategic discussions and table stakes conversations to help them prepare for leadership roles.

Allowing flexible time-offs and learning days can also help your A-players manage their work-life better. Constantly reaching out to them to give value, be it in the form of learning programs to sharing one-to-one feedback on their growth journey is a must.

For senior talent and high tenure employees, managers and leaders should empower them to contribute to the company’s direction and strategy. Team leaders and functional managers must conduct regular 1-on-1 discussion with A-players and help them visualize a growth path for the future.

3. Go Big on Rewards

Building a culture of recognition can help you improve employee retention by 41%. Rewards can come in many forms, be it monetary benefits to social recognition — but they are a must.

The contributions and impact of your A-Players must be openly recognized to keep them inspired and fulfilled at work.

HR teams and managers should celebrate the performance and value delivered by the highest performers of a company — and reward them openly during company meetings, town halls and all-hands.

Your best employees deserve the loudest pat on their backs — make sure to invest in delivering delightful rewards such as lucrative cash bonuses, performance based pay, stock options, shorter appraisal cycle, extra paid leaves, premium gadgets, event tickets or vacation packages, among others.

For example, Meesho, India’s hyper-growing e-commerce startup has its own MeeSOP programme to offer employee stock options to retain top talent. Under this programme, selected employees can convert 33% of their annual CTC into ESOPs. This encourages high performing talent to feel a sense of ownership in the company.

Public recognition goes a long way in boosting the morale of top performers and also sets a social example for other employees to follow. It’s a win-win for all sides.

4. Build an Engaging Company Culture

High performers want to work with great teammates where they can learn, contribute and make a difference. They want to be part of a winning team and work in an environment which promotes growth, understanding, trust and collaboration.

In 2023, companies must prioritize building a positive culture, here are some examples on how leading companies are going big on company culture.

Experts say that a strong workplace culture is the best employee retention strategy — thus, HR teams should start by listening to what top talent and high performing employees have to say. By seeking their input and ideas, you will show that you trust and respect them.

This ensures top talent gets to participate in contributing to the company’s vision, and they feel connected to shaping the company’s cultural vision together with the management.

Secondly, HR teams should encourage employees to take time off and participate in fun sessions and events, as a way to foster a sense of belongingness and de-stress.

Lastly, inclusivity at the workplace is an integral part of a happy, positive culture — and it’s the job of the HR to ensure every gender, race and opinion gets a seat on the table and every voice gets heard without bias or prejudice.

Retain or Re-Train: The Choice is Yours

Last year, around 41% of employees around the globe considered switching jobs. With voluntary turnover continuing to escalate in 2023, it’s important to invest in retention.

It’s time for HR leaders and teams to think beyond traditional carrots and sticks means to engage and retain the existing workforce, especially their top talent.

Retaining top talent will not only result in significant cost savings, but it’s an investment which will pay for itself by reducing the risk of employee turnover.

Yes, there’s a lot that can be done to boost employee retention, but it’s important to start with the four key steps we have outlined. By doing so, you can truly create a workplace which continues to attract and engage your company’s top talent.