Long gone are the days when employees would stick to one organisation forever in their careers--unmindful of the outcome -- until death or retirement.
The United States Labour Department estimates the average tenure of a millennial employee today to be about 3.2 years.
According to a 2015 study in India, 64% of the respondents surveyed had held their current role for less than five years, while nearly 35% had served their tenure for less than two years. Over the past decade, the trend shows that employees are no longer willing to continue with one company.
How do these findings line up with traditional HR wisdom which emphasises the fact that employee attrition rates are critical to the health of an organisation?
Several theories have emerged regarding the trigger point for this exodus–the desire for more work freedom, better-paying employment, and exhaustion from pandemic burnout. However, after two decades of working in HR and conducting scores of exit interviews, I've observed that millennials and Gen Zers expect much more from their employers than employees of the older generations aspired.
Older workers were happy with the slow but steady rise in their ranks. And in the wake of the global health crisis, people have been reassessing their priorities and asking themselves, "What exactly am I working for?"
Organisations should try to understand this basic understanding of the human psyche while addressing attrition and acting accordingly. We believe that the current trend is part of an evolutionary process and will define the future of work. The pandemic only accentuated and brought to the surface the lurking questions that were once easy to ignore. Lockdown and mortality, however, have drastically changed people's mindsets than we can imagine.
Bigger pay packages alone cannot stem the tide of talent defections. We must dig deeper if we're genuinely committed to retaining our talent. To develop a culture that retains top talent, we need to follow a "people-first approach," and it's much more than a PR catchphrase. It should be our very culture.
The power of hybrid
The Great Place to Work Institute predicted in 2015 that work-life balance could be one of the five most significant concerns affecting the future workplace. This finding was further corroborated by the Deloitte Millennial Survey of 2017, which found that 67% of employees believed flexibility positively impacted their productivity, while 65% agreed it increased their engagement levels and improved work-life balance.
To leverage the lessons from the previous year, companies must continue to offer a work environment that adapts to the changing times and demands. Provide a flexible work model in which employees can choose whether to work from home or the office. Allowing employees to make this decision for themselves, rather than being prescriptive, produces better results and empowers them to balance their professional and personal obligations.
Growth and learning
"Stay hungry, stay foolish” could well be the mantra of the millennials and Gen Zers, who are big on learning and view their jobs as the ticket to personal fulfilment. Josh Bersin, a prominent industry analyst, and thought leader says, "The learning curve is the earning curve."
In 2017, the Deloitte Review listed growth opportunity as one of the five elements that make an organisation 'irresistible' to employees. Millennials seek companies that provide them with more responsibilities and increase their opportunities for growth and learning. Companies that can tap into this motivation stand to boost employee engagement and lower attrition rates.
Even before the pandemic struck, a prominent report stated that millennials and Gen Zers were no longer considering their jobs as the means to an end—better lives—but also an opportunity to fulfill a bigger purpose. The pandemic only seems to have exacerbated this trend. A survey on employee retention conducted in the United Kingdom found that the top reason behind workers’ continuance with their employers was their alignment with the company's mission. As people seek more meaning and personal satisfaction from their professions, they support businesses that stand for something and help them do the same.
The line manager will play a significant role in fostering a strong sense of community and professional well-being. The focus should be on developing your managers into influential leaders who can have meaningful dialogues with your employees about their career and personal objectives. This could be a worthwhile investment. Only by taking an interest in the employee as a whole—as opposed to just what they do at work—you will be able to engage employees and help them bring the same inventiveness and vigour to their daily employment.
Helping workers realise how their contribution connects to the company's mission can also greatly enhance employee engagement, especially in the aftermath of the pandemic when employee morale and company culture are at an all-time low.
Culture is crucial to a company's success. A classic study from Forbes revealed that when cultures are more effective, businesses reap benefits in revenue growth, employee retention, stock price, and net income. Another study revealed a positive relationship between return on investment and return on sales.
Organisations need to cultivate a "culture of care." Empathy and understanding from managers will go a long way towards increasing teams’ productivity. Companies can lay down guidelines for what is ideal for the business and collaboratively determine how to best satisfy the business's criteria while simultaneously accommodating the employee's desire for flexibility.
There is a need for an open-door policy that encourages employees to interact directly not just with their line managers but with their departmental heads and the CEO.
A clear-cut organisational structure and a well-defined and flexible hierarchy that allows employees to express themselves on the right platform and trust their leadership for guidance and support are a must.
Also, a meticulous feedback session is going to help employees recognise and build upon their strengths. Acknowledgement is a critical component of care culture and takes time to celebrate not just skills and effort but the employee's demonstration of organisational values.
Changing business dynamics
The truth is that most employers today realise they can hardly restrict their employees from window shopping and auctioneering. However, as we have seen, pay is not the biggest motivation behind attrition or even the Great Resignation.
The fourth industrial revolution is redefining the workplace. With robotics, AI, and cognitive computing going mainstream and the emergence of platform sourcing, employers and employees have unprecedented opportunities. We can leverage technology to build a sense of unity, belonging, and togetherness; promote engagement; encourage knowledge sharing, and set up non-work engagement activities among teams. By intentionally creating an ethos where employees feel challenged and valued, we can help employees get what they want--recognition, growth, and meaningful labour.
Microsoft's recent research suggests that 41% of workers worldwide are "thinking about" quitting their jobs. Is this a cause for dismay? It depends on how we perceive it. As an HR manager, I would say there's hope because, after all, a thought is never an act. It's up to us to help our employees find it worthwhile to stay.