Developing Employee Retention Strategies for 2024

Only 4% who sign up to drive for Uber’s ride-hailing service are still driving a year later, as per a report by The Information. Full-time employees left the company at an elevating pace, bringing the attrition rate to 20% in just June of 2021.

This was owing to factors like unfair compensation, no-tip rule, return-to-office policy, and the pandemic.

With such a high attrition rate, Uber lost key talent – causing leaders to spend more resources on hiring and training rather than focusing on the business. This cast an unfavorable light on Uber’s culture and leadership in the industry.

And to make matters worse, there was an increase in competition from Lyft, which already gives the passengers the option to leave a tip.

Given the circumstances, Uber started allowing tipping and flexible working hours.

Julie Bevacqua, an entrepreneur with a proven track record of scaling successful startups, says,

In order to build a rewarding employee experience, you need to understand what matters most to your people.

Employee Experience (EX) undeniably affects retention, but does it make any difference to the core business?

Let’s get to the bottom of this question by examining Boeing’s 737 MAX crash.

Analyzing the EX turbulence that led to a rough landing: The Boeing 737 tragedy

“Would you put your family on a MAX simulator trained airplane?”

“No.”

This internal messaging exchange took place between two employees on February 8, 2018 – eight months before the first aircraft crash took place. The company’s CEO, Dennis Muilenburg, testified that prior to the crashes that killed around 350 people, employees knew that something was wrong.

During the aircraft’s testing and building, employees had some safety concerns about its functionality.

A Boeing employee contacted the General Manager of the 737 program to express the following concerns:

“I have some safety concerns… My first is that our workforce is exhausted. Employees are fatigued, and fatigued employees make mistakes….” He continued: “…And for the first time in my life, I am sorry to say that I am hesitant about putting my family on a Boeing airplane.”

Unfortunately, Boeing experienced a tragedy, and another one following it. This changed the company’s bottom line, image, and the perspectives of employees. Failing to create a culture of trust and transparency has cost them immensely.

Who is to blame?

While employee experience falls under the purview of HR, this isn’t just an HR issue.

As Josh Bersin, Founder and Dean of Josh Bersin Academy, said:

Employee Experience is a company-wide initiative to help employees stay productive, healthy, engaged, and on track. It’s no longer an HR project. It is now an enterprise-wide strategy.

EX is all about delivering the tools required for productive work. Apart from HR issues like pay, wellbeing, etc., it is also about safe workplace protocols, shift scheduling, and employee learning. The CEO should think of EX as the fuel that runs the business. If successful, it drives retention, customer success, engagement, brand, and many more.

But where did Uber and Boeing go wrong?

EX and retention mistakes to avoid for achieving business success

A Gallup poll found that it takes more than 20% of pay raise to convince an engaged employee to stay, but no pay increase to convince an unengaged employee.

You may lose 1 in 5 of your high performers within the next 12 months, as per PwC’s Global Workforce Hopes and Fears Survey. Many companies still struggle to understand why employees leave, and this is caused when they commit their first mistake:

1. Employees are not involved in the process

EX is just like Customer Experience (CX). The customer has a significant role in product and marketing-related questions. EX is also built on the same idea. Employees are the internal customers, who take on the central role. Companies should understand their needs, desires, and requirements when developing any strategy – whether it be for retention or improving employee experience.

Now, when should companies start involving employees? Unfortunately, most companies focus on their retention strategies after employees leave. This is where the second mistake comes in:

2. Not starting from the hiring process itself

Just like how a company loses customers due to poor customer service and products, it loses employees due to bad employee experience. Employee retention strategies start with understanding what makes employees happy, what employee experience means to them throughout their employee journey – from the hiring and onboarding phase itself.

The next mistake is what some companies overlook when it comes to retention:

3. There is no policy for employee engagement

To define employee engagement,

It is the level of an employee’s psychological commitment the employee has to their organization.

While employee engagement is often synonymous with happiness and satisfaction, it rather refers to an employee’s enthusiasm and commitment to their job, workplace, and company’s success. When they are engaged, they care about the company’s goals and do their best.

This is why 71% of executives say that employee engagement is critical to their company’s success, but 85% of employees are not engaged at work (as per Gallup’s State of the Workplace). Another Gallup’s report shows that a highly engaged workforce increases revenues by 21%!

Hence, companies should practice employee engagement activities to build an enjoyable environment. But employee engagement activities alone are not enough.

4. Employee engagement is not tracked

Just like it’s important to track feedback from customers, it’s also critical to track employee engagement. Companies can then make the changes needed to improve. Employee engagement is best tracked via pulse surveys or engagement surveys. Tools like IceHrm help design surveys and evaluate what’s missing from the culture, helping provide an awesome employee engagement experience. Apart from this, companies can collect feedback, analyze employees, measure key metrics, and many more.

Now that we have an idea of where Uber and Boeing went wrong, let’s explore the important touchpoints that should not be missed when developing a retention strategy.

A 360-degree analysis of EX touchpoints in the employee journey

Employee experience (EX) is delivered in every stage of the employee lifecycle. It starts from the talent attraction stage and stays long after the employee has exited the company. Findings from Gallup reveal that companies that prioritize EX have 41% lower absenteeism and 17% higher productivity

1. Keka’s Quest Model

Keka’s Quest Model follows a saying by Fyodor Dostoevsky:

Deprived of meaningful work, men and women lose their reason for existence; they go stark, raving mad.

Employees look for meaningful work, wanting to know how their work matters and the impact on the organization and society.

For example, Dorothee Ritz, Microsoft’s GM for Austria, urged that employees knew how Microsoft technology was being used while also showing its impact on the society. Managers spent several days with police officers and hospitals to learn how to use remote data. Soon, employees started suggesting meaningful solutions for their customers based on their visits.

Dorothee believed that this simple practice gave the employees a better sense of the real value of their work. This starts with getting employees away from their desks and stations to help them understand the impact of their work.

This model consists of four key factors:

• Interesting, meaningful work
• Expectation (from work)
• Challenges (in work)
• Commitment (to work)

People naturally want to be a part of something, a part of a larger story – while their efforts are being recognized. Moreover, managing employee expectations will dramatically improve retention rates.

How?

One study revealed that almost 50% of employees left their jobs because they did not meet their expectations. Employees want to feel challenged and committed to their work – all a part of achieving something meaningful.

2. Herzberg’s two-factor theory

This is the second touchpoint. Herzberg’s two-factor theory is split into two: motivating factors and hygienic factors.

Motivating factors are the key elements that make an employee stay and grow in their role. These factors include:

• Achievement
• Belongingness and purpose
• Job advancement
• Career growth and development

The other factors are hygienic – meaning that they are not the key factors that motivate an employee to stay, but in which their absence or mishandling causes dissatisfaction, ultimately, making employees look for other employment opportunities. Hygienic factors are:

• Work environment
• Compensation
• Policy & administration

But who is responsible for ensuring employees are motivated?

As Herzberg himself said, “It’s the job of the manager not to light the fire of motivation, but to create an environment to let each person’s personal spark of motivation blaze.”

3. Expectancy Theory

Expectancy theory is the third touchpoint. It was introduced by Victor Vroom in 1964. This theory is based on the perception that individuals are motivated to perform if they know their efforts will bring the desired outcomes. This also means that employees will perform more if they know that extra performance is rewarded and recognized. It includes factors such as:

• Performance management
• Supervision and leadership
• Rewards and benefits

When performance is linked with rewards, recognition, feedback, and improvement, productivity and retention will improve. However, rewards and recognition need not be linked to just performance.

4. Social exchange theory

The last touchpoint is social exchange theory, which helps understand why people behave the way they are. It provides a cost-benefit analysis of continuing a relationship, whether organizational or personal. In an organizational setting, leaders focus on their employees’ positive workplace relationships. If the employee doesn’t have positive connections at work, he is most likely to look for it elsewhere – as such relationships are not beneficial to him.

Ultimately, this theory helps structure company culture and an environment that promotes rapport, belongingness, and friendliness – influencing retention significantly. It has 2 factors:

• Organizational trust, and
• Communication between employer and employee

Now that we have explored the important touchpoints, let us dive into employee retention strategies for 2024.

Effective employee retention strategies for 2024 and the future

Employee retention is a challenge, especially now because of the changing workforce. Most younger workers have fewer obligations and would rather bounce from job to job. One of the major reasons for employee turnover is lack of trust.

A Tolero study revealed that 45% of employees quit because they didn’t trust their employers. To retain employees, follow the strategies discussed below.

The strategies are grouped into 4 categories:

• Job
• Culture
• Personal
• Economical

1. Job

• Employees can increase their knowledge in a specific area of work or role they might be interested in through job shadowing. This can be one way to retain employees while also developing their skills and abilities.
• When it comes to learning, employees like to follow their own learning style and pace. In this case, self-directed courses are a great way to encourage people to develop their own goals and improve knowledge.
• A former CEO of Cisco rightly said, “At least 40% of all businesses will die in the next 10 years.. If they don’t figure out how to change their entire company to accommodate new technologies.” Access to the latest technology is one of the biggest drivers of employee retention as employees will have the opportunity to grow, develop, and be promoted.
• Employee feedback loops are a holistic approach to utilize the feedback received from employees. Organizations can improve the workplace environment or employee experience, depending on the feedback.
• By investing in an employee’s career, individuals can enhance their skills, knowledge, and capabilities. By doing so, organizations can foster loyalty, engagement, and long-term employee retention.
• Regular compensation reviews are important to make sure the company’s compensation plan is up to date with shifting markets. This is essential for maintaining a motivated and engaged workforce.
• Providing leadership training helps employees unlock their potential and meet organizational standards at work. By supporting their advancement and progress, organizations can facilitate not only productivity but loyalty as well.

2. Culture

• Organizations can promote a holistic employee well-being by providing mental health services at work. This could be through employee assistance programs, flexible scheduling, vacation days, wellness benefits, and so on. This reduces employee absenteeism and potential turnover.
• When creativity and new ideas are recognized, it shows that the company values and appreciates the contributions of every employee. A culture of innovation is fostered where ideas are welcomed, and failures are seen as learning opportunities.
• Using a discovery map for onboarding gives new employees an opportunity to learn about the company’s story, speeding up their onboarding training. Research by Brandon Hall Group revealed that great employee onboarding improves employee retention by 82%
• Long service employees are the most important employees, and they possess valuable knowledge and experience. They are extremely hard to replace. Thus, appreciating them through long service awards is crucial.
• Stay interviews immensely help in building employee morale and retention. Implementing such changes is a cultural improvement that helps recruit top talent.

3. Personal

• Aligning personal and company values is the key to employee engagement. These values affect how employees show up and function in their daily lives, including at work.
• A family and childcare assistance policy offers employees the support they need to balance work and family responsibilities. Ultimately, productivity and retention rates improve.
• Encourage employee resource groups to conduct DEI training. These groups deliver real value in promoting diversity and inclusion. This not only improves the brand image but improves retention as well.

4. Economic

• Employees would want to maintain their standard of living despite rising costs. If employers fail to adjust salaries to growing inflation, it may be hard to keep holding onto employees.
• Ever since the pandemic, employees have been demanding remote work options or a hybrid working model. Owl Labs found that 79% of managers believe that their teams are more productive when working remotely, and half of the workforce is ready to quit if not offered work from home.
• Community involvement can make organizations a more favorable option over other competitors because employees like to deal with organizations with the same values.

On that note…

Retaining employees is undeniably harder than recruiting them. It all starts with effective recruitment, which is more than hiring the right person for the right job. It includes enhancing brand reputation from the candidate’s perspective and engaging them until they feel comfortable in their role. However, things may go wrong if you look for talent in the same old places. Our blog here talks about the different talent landscapes that can be explored.

Try out IceHrm today to start creating the kind of workplace culture that encourages employee retention and engagement!