Employee retention best practices in Australia today

Organisations across Australia continue to struggle with retaining employees, maintaining an attrition rate of 9.5% in 2023, based on a report by the national employer group, the Australian Industry Group. This means at least 1.3 million Australian professionals changed employers during a one-year period.

Worse, the latest LinkedIn Market Research shows that high job mobility may continue in 2024, as 76% of working professionals across the country have expressed a desire to change jobs for a fresh career start this year. 

And it’s not an isolated phenomenon. In the United States alone, at least 5 million workers quit every month. According to the US Bureau of Labour Statistics, more than half of the average turnover rate in America is due to voluntary resignation. 

If you are an organisation that can’t afford to lose your best people to new opportunities, then this might be a good time to review your employee retention program. Is it working? Does it respond to the needs of your people today? What else do you need to keep your workforce intact?

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Hiring the right fit

Some managers mistakenly think that retention work starts in employee management. But the truth is that employee retention starts in the hiring process. Multiple studies have shown that a robust recruitment process significantly contributes to long-term employee satisfaction and commitment. 

organisations must recognize the importance of a thorough hiring process that goes beyond assessing skills and qualifications. Cultural fit plays a pivotal role in employee retention, with a Robert Walters Group study showing at least 73% of professionals quit because of poor cultural-fit. 

The same study even said that 81% of hiring managers found that candidates working for a company where culture fits are less likely to leave. Moreover, companies that prioritize aligning candidate values with organisational culture are more likely to foster a sense of belonging and loyalty.

Meanwhile, integrating personality assessments into the hiring process can provide valuable insights into a candidate's compatibility with the team and company ethos. 

By gaining insights into a candidate's personality traits, communication style, and work preferences, employers can make more informed decisions about whether the individual is likely to thrive within the specific dynamics of the team and contribute positively to the overall workplace environment. 

This approach fosters a cohesive and harmonious atmosphere, paving the way for enhanced collaboration, reduced friction, and ultimately, a more sustainable and positive workplace culture.

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Creating a positive work environment

Establishing and maintaining a positive work environment is instrumental in retaining valuable talent. Research indicates that a workplace culture characterized by positivity and inclusivity contributes significantly to employee satisfaction and, consequently, retention rates. At least 79% of candidates say they research a company’s culture, including its mission and vision first before applying, a Glassdoor study showed. 

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The essence of a positive work environment encompasses various elements, starting with fostering strong interpersonal relationships among team members.

Employee engagement initiatives play a pivotal role in cultivating a positive atmosphere. A USC WorkWell study showed that at least 87% of employees are less likely to leave their employer. This demonstrates a direct correlation between engagement and employee commitment. 

Whether through team-building activities, employee recognition programs, or open communication channels, organisations can enhance the overall workplace experience, leading to increased job satisfaction and a reduced likelihood of turnover.

Additionally, addressing work-life balance and prioritizing employee well-being are integral components of creating a positive environment. organisations that actively support flexible work arrangements or provide wellness programs often report higher retention rates, illustrating the tangible benefits of acknowledging and addressing the holistic needs of employees.

Professional development opportunities

Investing in the professional growth of employees is a cornerstone of effective employee retention. A LinkedIn recruitment study showed that professional growth is among the top priorities of employees. The study said most HR leaders mistakenly believe that career advancement is the sole aspect of professional growth that employees want, when the numbers say that continuous learning and training has a big share of the pie as well.

“Again, recruiting professionals may be approaching this from the company’s perspective, rather than putting themselves in the candidate’s shoes. The data shows that candidates are equally interested in developing new skills and advancing up the ranks — but if you focus exclusively on growing within the company, it could signal that you’re putting the company’s best interests ahead of what the candidate really cares about,” the study said. 

A separate study also found that 94% of employees said they would stay at a company longer if they were offered opportunities to learn and grow. Continuous learning initiatives, such as workshops, training programs, and skill development courses, empower employees to enhance their expertise and stay abreast of industry trends. Beyond the immediate benefits of skill acquisition, professional development fosters a sense of investment in employees, demonstrating that the organisation is dedicated to their long-term success.

Mentorship programs also contribute significantly to employee retention. Research by California-based tech company found that employees engaged in mentorship relationships were likely to stay committed to the organisation. Creating a structured framework for mentorship within the organisation can nurture a culture of collaboration and support, reinforcing the notion that employees are valued contributors to the company's success.

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Effective communication strategies

Open and transparent communication is a linchpin in fostering a positive and engaging workplace environment. Regular feedback sessions and performance reviews provide employees with a clear understanding of their contributions and areas for improvement. An independent study by Gallup showed that structured and consistent feedback reduces turnover by 14.9% in most cases.   

And because communication is a two-way street, open safe and private channels for feedback from the employees. Streamline these feedback channels to ensure that their feedback reaches the managers or leaders who can respond and take action. Remember, the more your people feel that management listens to them, the more they are likely to stay.

This feedback loop then becomes a source of information that can provide insights that HR leaders can use for data-driven people strategies. With this data, leaders can make necessary adjustments and continually enhance communication practices, aligning them with the evolving needs of the organisation.

Utilizing communication tools and platforms further enhances collaboration and ensures that information flows seamlessly across the organisation. Whether through team meetings, digital communication channels, or collaborative platforms, organisations that leverage effective communication strategies reinforce a sense of belonging and shared purpose among employees.

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Recognition and rewards programs

Acknowledging and rewarding employee contributions are fundamental to building a culture of appreciation and loyalty. Recognition serves as a powerful intrinsic motivator by fostering a connection between an employee's efforts and organisational appreciation, ultimately contributing to job satisfaction and increased commitment.

Rewards and recognition can come in various types and forms. Leaders can recognize individual achievements, such as exceeding performance goals or demonstrating excellence in specific tasks. Some choose to give out team recognition to emphasize collaboration and team success. Some leaders also choose a formal approach to recognition, like “employee of the month,” while some choose informal acts of recognition, such as personal thank you notes, to be more intimate. 

Whatever the case is, it is best always best to incorporate incentives when giving out recognition. Monetary benefits are instant motivators, but non-monetary rewards can have an equally powerful impact on employees. In giving out rewards, never limit your options. Incorporating a mix of monetary and non-monetary incentives allows organisations to cater to the diverse preferences and motivations of their workforce.