Michael D. Brown is Senior Managing Partner at Global Recruiters of Buckhead, a top executive recruiting and leadership consulting firm.
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Recent years have given rise to several workplace trends, such as quiet quitting and loud quitting. Having emerged from the Great Resignation and the Great Rehire, these trends describe two ways employees deal with job dissatisfaction. The quiet ones stay and do the minimum amount of work required to keep their job, while loud quitters are more expressive of their grievances.
High turnover hurts organizations in many ways, and not all of them are financial. Disengaged or disgruntled employees also impact morale, weakening the culture and potentially proliferating as more people follow suit.
One in three employers say they anticipate higher turnover in 2024, leaving a financial impact and burdening remaining employees. Factoring the cost to rehire and lost productivity, this trend could cost companies $36,295 annually, but 20% of hiring managers would peg that number at $100,000 or higher.
There is no question: Companies must act decisively to improve retention. Determining the underlying cause of employee challenges is the first step. Only then is it possible to develop meaningful strategies and solutions to prevent matters from escalating.
Retention Metrics To Track During Quiet And Loud Quitting
Although the Great Resignation isn't as prominent in the headlines anymore, it's still very much ongoing. According to PwC's 2023 Global Workforce Hopes and Fears Survey, 26% of respondents were planning to quit their jobs in the next 12 months, up from 19% in 2022. And according to a 2023 Gallup survey, around one-third of employees were engaged, while 18% were actively disengaged. Low engagement is directly attributable to low productivity and morale, which costs global employers $8.8 trillion annually.
While the reasons for these decisions vary, most are leaning on work-life balance, mental health, better salaries and a focus on career growth, while others want recognition and incentives. Individual rationale aside, tracking retention metrics may help you identify problem areas before they become a more significant issue. Here are some of the most essential things to measure.
• Retention Rate: This provides a high-level view of workforce stability and will indicate how effective your employee engagement efforts are. Be sure to measure the segmented retention rates within a group, department or category. Looking at individual segments will pinpoint problems the big picture does not address.
• Employee Satisfaction Rates: It's incredibly valuable to determine how likely employees are to stay or go and how engaged they are in their work. In particular, new employee satisfaction rates are critical because they indicate the quality of your onboarding process.
• Average Length Of Employment: You need to know how long people tend to stay at the company. This metric may help you identify patterns or roadblocks.
• Turnover Rates: Knowing the workforce turnover rates will tell you how happy employees are in their jobs. Consider the termination rate. When high, it can point to poor hiring or training or highlight performance issues. Determining the voluntary rate—the number of people who leave the company of their own volition—may highlight any problems with your culture, management, or work conditions.
• Turnover Cost: You'll need a quantifiable number to gauge the financial impact of turnover as a basis for transforming your retention strategy.
• Time To Hire And Time To Fill: These metrics determine measures of how long it takes to fill a job vacancy. Time to hire measures how quickly you can identify a suitable candidate, while time to fill looks at the length of the hiring process. The average to strive for will depend on the position, industry and the frequency of openings for that particular job.
• Absenteeism: The amount of time that people take off work can be a sign of employee disengagement or unhappiness.
Now that you know what to measure, let’s talk about why it’s vital to do so.
Retention Starts With Smart Recruiting
Hiring the right talent from the get-go minimizes the risk of simply filling an opening quickly out of desperation. Doing so results in regretted hires, who are poor fits overall and far more likely to disengage. Data from PWC indicated that, in 2020, 77% of employees who quit said their employers could have retained them. Knowing this, it’s easy to calculate the potential cost of inaction. Knowledge is power. With a little shift in strategy, you can turn your retention rates around.
Here are a few ways to prevent your talent from leaving and keep them engaged and motivated.
• Implement A “Re-Recruiting” Policy: Re-recruiting involves making a preemptive offer before your top talent gets one elsewhere. Ultimately, you want to make your company so attractive that they won’t want to leave. Strategies include providing financial incentives, better career opportunities and flexibility. It also means prioritizing culture and connection and making employees and their families a priority.
• Measure Retention And Diagnose Departures: Ongoing measurement and analysis of exit data is critical to understanding why employees leave. Through this practice, you can see patterns emerge, indicating where improvements need to happen.
• Create A Purpose-Driven Culture: Today’s workplace serves five generations, a phenomenon unprecedented in the history of work. You need to understand what drives and motivates each demographic so you can ensure the internal culture supports those needs.
Measuring And Understanding True Retention
If you're experiencing high turnover, whether it’s loud or quiet, the cost is exceedingly high. The traditional “revolving door” metaphor is no longer sufficient to describe today’s retention crisis—nor is it a reason to justify inaction. Measuring retention and analyzing why employees exit is an essential first step to rectifying the problem, and it’s within your power to do it.
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