Happy woman

Staff retention is set to become one of the biggest HR challenges for 2016. When 77% of HR professionals said the organisation had struggled to recruit suitably skilled staff over the previous year in 2015, the latest employment figures suggest the problem is only going to get worse. How can a business safeguard its best employees from being poached by the competition? Or avoid those damaging dips in morale that send increasingly confident individuals out into the market to look for something better?

At a time when many companies are actually looking to increase staff numbers, here are some tips on how to retain the talent required to support business growth in 2016.

Time for change

Everyone is familiar with the January blues, that post-Christmas and New Year slump that can cause morale to plummet and individuals to struggle with motivation. Add in the ‘New Year, New Challenge’ mantra adopted by many people, and companies face a tricky time in ensuring key personnel do not jump ship. For HR teams already struggling to build employee numbers back up to pre-financial crisis levels, the issue of staff retention is becoming increasingly critical.

The problem is that with a dearth of skills, especially in key areas such as management and technical staff, there are compelling opportunities for those looking to move jobs. With switched on employers tempting candidates with a mix of flexible working, comprehensive benefits and great career progression promises, organisations are going to have to work hard to offer strong reasons to stay.

Critically, this issue is not just about HR – good managers have a huge influence over the levels of staff retention. Indeed, bad management is often cited as a key reason for leaving a company. Ensuring that every senior member of the business has received good training in staff management and motivation is something that is too often overlooked, but can have a significant impact on attaining and retaining the right staffing levels.

Career development

Staff retention is not just about money. Indeed, employees are increasingly looking for far more than a boost to basic salary. Benefits packages need to be tailored to meet employee specific requirements – with a growth in family friendly options that include health insurance, payment protection and critical illness cover. Bonus and commission schemes increasingly need to be amended to reflect changing business models that include online sales; while demands for flexible working are beginning to dominate in response to changing demographics that are driving growing numbers of employees to undertake social care activities for both children and elderly parents.

Within this complex mix of employee motivations, one of the most pressing concerns for HR and management to address is the issue of employee development. Career progression – or the lack of it during the lean times post 2008 – has been a problem for many companies. When staff levels were cut to the bone in order to survive, opportunities for promotion and career development were thin on the ground. Employees are therefore now understandably looking to make up for lost time and aggressively seeking promotion and development options.

Indeed, seven in ten UK employees feel as though they are ‘stuck in a job rut’ and are unhappy with their future career prospects – a level of job dissatisfaction that is costing employers £16,000 per employee in staff turnover. Today’s flat organisational structures are hindering career progression and a lack of opportunity is cited as the main reason people left their last role.

These individuals are incredibly valuable to the business – not only have they been in place for some time and have fantastic insight and knowledge but, having survived the downtimes, they should have a strong degree of loyalty and commitment. Yet less than half of employers have improved learning and development opportunities to convince people to stay, according to the CIPD. Employers appear to still prefer hiring external talent over developing or promoting internal candidates, with 74% recruiting key talent from outside the organisation – up 51% from 2013.

When hiring new talent is both expensive and increasingly difficult, organisations need to look far more closely at creating strong training and progression programmes, including offering staff the opportunity of moving around the organisation between teams and offices, to improve job satisfaction, cut turnover and safeguard these essential skills over the next few years.

Flexible working

Flexible working is increasingly at the heart of successful employee acquisition and retention strategies. With more and more individuals responsible for caring for people at home – both children and adults – the demand for flexible hours is growing. But simply offering flexible working is not enough: organisations need to consider carefully how to manage the business with more part-time workers and an increase in home working and to ensure these workers remain committed to the company.

From a management perspective, while flexible working will help to minimise the upheaval associated with staff turnover, it can be challenging to manage those working from home. Tracking productivity and performance is clearly essential but organisations also need to consider other issues. What is the individual’s working environment at home? An employee sitting with a laptop on the sofa is clearly not complying with health and safety. Good communication with colleagues in the office - via videoconferencing for example – as well as access to HR systems for booking training courses or making holiday requests are also important to ensure the individual remains engaged with the business as a whole.

Indeed, traditional measures of potential employee unhappiness – such as sickness absence – tend not to apply for home workers; therefore it is important for organisations to be far more proactive about ensuring the technology, communication and good management practices are in place to support flexible workers.

Work/life balance is without doubt becoming increasingly important for employees at every level in the organisation. And with a skills shortage and high levels of employment, individuals are now in a position to make demands on the business. However, the truth is that few individuals actively seek employment change without a really good reason. A new job represents upheaval and it is risky – who knows if the promises of the new employer will really match up?

Benefits are important, as is the option of flexible working. But when it comes down to it, employees will stay with a business if they feel valued and an important part of the company. Do managers routinely visit the shop floor and understand the day to day issues faced by employees? Are they regularly recognising employee contributions and working hard to create a better working environment?

Job satisfaction is key to improving retention. As employee temptation to change increases in 2016, companies will need to improve management, deliver excellent communication that demonstrates to each individual his or her value to the business, and embrace a proactive approach to training, development career progression in order to safeguard essential people and skills.

By Roger Moore, Managing Director, Bond HR & Payroll Software