The last year has seen a huge exodus of employees leaving their current jobs. Also known as the Great Resignation, the ongoing employment trends began in early 2021 across most countries globally. According to the U.S. Bureau of Labor Statistics, resignation figures peaked in April with a record-breaking 10.0 million open jobs at the end of July. The Asia Pacific region is no stranger to this phenomenon, with close to 69% of organisations across Southeast Asia reporting an increase in turnover in the first half of 2021 compared to the same period in 2020 based on Mercer’s Hiring and Retention Survey.
In order to tackle this global shortage of skilled workers, organisations need to first understand and address the root cause of this problem. Based on market analyses conducted by Outsmart, statistics from its Trends in Employee Resignation Rates: Watch Out for Summer 2021 revealed two key trends: resignation rates are highest among mid-career employees, typically employees between 30 and 45 years old. Interestingly, resignation levels are actually lower for employees that fall within the 20 to 25 age range, which is likely due to a combination of both greater financial uncertainty and lower open positions for entry-level workers. Resignation levels are also highest within the tech and healthcare industries. For the latter, this is not a surprising trend as employees in this field had likely experienced extreme increases in workload and burnout due to the pandemic.
These trends highlight that there is a need for a more targeted and data-driven approach to improving retention. Organisations need to deep-dive into their workforce, determining the number of people who are quitting, which career level or jobs have the highest turnover risks, what are some of the trigger points and what can be done to prevent it. These data and insights will differ for each organisation but leveraging these steps will help organisations to define effective people retention strategies.
Identify and quantify the problem
Before exploring the underlying causes of high turnover, it is important to first quantify the scope of the problem and its impact on the organisation. Start off by determining the turnover rate based on this formula: total number of exiting employees divided by the average number of employees. A similar formula can be applied to determine the voluntary and involuntary rate. Organisations can also consider analysing turnover rates at a more granular level, such as by departments or by career levels. This helps business leaders and HR to gain visibility on where the retention problem lies.
The next step is to determine the impact of these resignations on key business metrics. When an employee leaves, remaining teams often find themselves slightly stretched from the lack of resources or critical skill sets. This can have a detrimental impact on the quality of work as well as time-to-completion. Having these key analyses provides better insights on the cost impact of these resignations on the business.
Conduct a root cause analysis
Once business leaders and HR have identified where the retention problem lies, the next step is to determine what are some of the contributing factors. Are employees unhappy with the workplace culture? Are employees feeling burnt out from an increase in workload? Are subordinates unhappy with their direct line managers? Asking qualitative and quantitative questions can help HR to better pinpoint the exact causes of high turnover rates in each employee group. This helps HR and business leaders to curate tailored retention strategies targeted at employees who are high flight risk.
Develop tailored retention programmes
There is no such thing as one-solution-fits-all when it comes to addressing turnover rates. A retention strategy should be flexible, tailored and selective. Leveraging insights from the root cause analysis can allow HR to develop retention solutions aimed at specific groups of employees. For example, if retention levels are high among younger employees with extremely short years of service, designing specific strategies such as lateral movement opportunities or plenty of professional development opportunities can help to retain key talent.
Investing in a robust employee retention strategy pays off in a number of ways. It helps organisations to retain valuable and critical talent, minimise turnover costs while motivating existing employees. At the same time, it enhances employer branding as employees are likely to feel that the organisation is investing in their professional development and well-being. Engaged employees who feel integrated within the organisation are likely to act as positive multipliers. This means that they will automatically attract, from their own networks, new talent – ultimately building up a team of valuable resources in the long run.