by the Skills Accelerator team
According to the Society for Human Resource Management (2008) replacing an employee can cost up to 50% - 60% of an employee’s annual salary. Whilst organisations will no doubt be concerned with the financial impact; these are not the only cost to the organisation. High staff turnover costs time and other resources such as training and development to get new employees up to speed. It can also impact on productivity and knowledge retention within an organisation.
In an increasingly competitive marketplace and with the fallout from Covid-19 (see blog - how has the business environment changed post Covid?) reducing staff turnover is a key priority for organisations. Research has highlighted the mass resignation trend and a rise in attrition, which looks set to continue in 2023. In their latest report the U.S Bureau of Labor Statistics reported that just over 4 million US workers had quit their jobs in August 2022, with organisations in accommodation and food services seeing the greatest increase in employees quitting.
The dynamic changing landscape in the world of “work” has meant American companies are finding a strategic approach to employee retention is essential, regardless of the sector or type of organisation.
How can retention be improved by upskilling?
Recognition of the importance of upskilling
Priority should be given to developing a clear strategy for upskilling staff. Identification of individual training needs that are aligned to an employee’s current role, as well as any future career progression is vital to retain employees, keep them motivated and prepare for future skills needs. In their recent poll of 2000 Americans, Bonusly (2022) found that 68% would not want to work for a company with no internal advancement. Whilst many organisations offer training and development opportunities, many fail to provide the necessary resources and allow the time for employees to fully engage. A clear commitment to investing in staff development is an employee benefit that can be marketed to future employees!
Recognise and reward employees
Whilst financial rewards remain a popular incentive, research indicates that employees are looking for more than cash. Skills development is ranked by many workers as a key benefit (Gerdeman 2019). Upskilling employees should offer a clear benefit to the organisation and the employee. Organisations that offer comprehensive training programs enjoy a 24% higher profit margin (Bonusly 2022). Employees who feel appreciated are more likely to be engaged, productive and more positive about their working environment. Providing a clear route for training and development should be part of the employee benefits package with clear recognition of employee’s commitment to engaging with learning and development. This links to your employee value proposition (EVP) which is covered below.
Develop a learning culture
In addition to offering professional development opportunities, organisations who have a culture of life long learning tend to experience lower staff turnover. Many employees welcome the opportunity to develop their skills within their roles, but this can sometimes be overwhelming and appear in addition to carrying out the day to day role. The pandemic has also encouraged workers to seek a range of learning opportunities that meet both personal and professional needs, with online learning increasing during the pandemic. Employers must therefore understand the motivation for learning and provide opportunities for personal growth and development from a wider and varied range of sources. In a recent report by NESTA (2019) on what motivates adults to learn? Three key areas were identified as external factors that impact on adult workers motivation to learn.
> Opportunity: The extent to which learning is supported/encouraged by employers
> Access: Flexibility of learning provision
> Quality of training: The effect of positive or negative learning experiences on future intentions.
Quality of training is an important aspect to ensuring workers engage with the learning process and are able to put their learning into practice to meet the needs of the organisation.
Use insights to improve your offering
Employer branding is gaining momentum as employers seek to attract and retain the best recruits. If a member of your team decides to move on, then use the opportunity to gain insight into what can be improved from an organisation perspective. This then needs to form part of your employer brand strategy. According to recruitment company Randstad, with the average cost of hiring a new employee now above $4,000, developing an authentic employer brand that communicates your employee value proposition (EVP) is vital to improve employee retention rates.
Why Skills Accelerator?
Human capital is one of the most valuable assets in an organisation and an important aspect in gaining and maintaining competitive advantage. Therefore, investing in an employee’s career development or ensuring your staff have the right skills to excel in their role is fundamental in a 21st century organisation. Pearson’s Skills Accelerator is designed to make learning and development easier and more effective. Considering the motivations for learning, Skills Accelerator offers a range of courses that allows your staff to feel fully engaged in their learning and development journey. Flexibility is a key benefit of Skills Accelerator with courses designed to meet your business needs and the needs of the employee, through an online learning platform.