In the midst of the ‘Great Resignation’ phenomenon, organisations worldwide are grappling with the challenges of retaining their valuable talent. Key findings from the 2023 State of Employee Retention Report* shed light on this pressing issue,
Amongst the findings, revealed a sobering truth for businesses operating remotely. Surprisingly, year-on-year retention rates have declined for many of them. The transition to remote work has resulted in a noteworthy 3.82% drop in employee retention rates, prompting us to question whether the shift towards remote work, offering enhanced flexibility, improved work-life balance and liberation from the daily commute, has come at a cost.
Hive delved deep into the research to unearth more retention insights, and extract the top 5 headline findings that reveal the crucial drivers behind employee retention and the factors pushing employees to seek new opportunities.
The top five headline findings from the report:
Remote-based businesses experienced a drop in year-on-year retention rates:
- The challenges associated with remote working, such as isolation, work-life balance issues, and collaboration difficulties, have contributed to lower retention rates in remote-based businesses. The normalisation of remote work has expanded employees’ choices and reduced the constraints of daily commutes.
Professional service sector faces retention challenges:
- The professional services industry has witnessed a decline in retention rates, potentially due to intense competition, long working hours, and a lack of work-life balance inherent in this sector. HR leaders in professional services need to focus on engaging employees, shaping a performance-driven culture, and enhancing talent management practices.
Prioritising talent attraction and retention yields positive results:
- Organisations that make talent attraction and retention integral to their HR strategies achieve higher retention rates. By fostering a positive culture, offering competitive salaries and benefits, and providing learning and development opportunities, companies can significantly improve the employee experience and retention rates.
Poor retention rates in medium-sized organisations:
- Companies with 5,001 to 10,000 employees struggle with lower retention rates due to the challenges associated with managing large workforces. Communication gaps, difficulty in catering to individual employee needs, and a lack of belonging can hinder retention efforts in organisations of this size.
Career progression as a key driver of employee turnover:
- Employees cite a lack of career progression as the primary reason for leaving their jobs. To retain talent, organisations must provide opportunities for growth, challenge employees with new responsibilities, and invest in learning and development initiatives. Empowering employees to advance in their careers leads to higher retention and increased engagement.
While the report highlights positive retention rates in certain industries, it also underscores the need for improvement across sectors. Factors such as intense job markets, poor organisational culture, limited career development prospects, and leadership changes can negatively impact retention rates. Employers must proactively identify these unique influences within their organisations by encouraging employee feedback through open communication channels.
“Our research demonstrates that the state of employee retention varies across industries,” says Heather Angiolini, People Scientist at Hive. “While many sectors are making efforts to improve retention rates, there is still a long way to go in ensuring sustained high retention without experiencing year-on-year decreases.”
To combat these challenges, organisations must prioritise employee feedback and identify areas for improvement. By focusing on creating a positive employee experience through culture, benefits, career progression, leadership, and employee well-being, employers can enhance retention efforts.
The report also highlights the impact of remote work on retention and suggests measures to support remote employees. By adopting strategies that prioritise talent attraction, offering competitive compensation and benefits, and investing in career development, organisations can create an environment where employees thrive, contributing to higher retention rates and overall.
*Report from hive