+61 9555 7955Unlocking Employee Loyalty: Three Key Levers to Better Retention Rates
The number one challenge for Australian Business Leaders
In KPMG’s recent Keeping us up at night report, 77% of Australian Business leaders reported that their top challenge for 2023 is talent acquisition, retention and re/upskilling. And they are predicting this will continue over the next 3-5 years. With an unemployment rate at a five-decade low, “the challenges around finding and keeping good quality staff in Australia have clearly become more acute”. In other words, employees can afford to be choosy.
Image credit – Australian Bureau of Statistics, Labour Force, Australia, March 2023
This is confirmed by NAB’s Q1 2023 Changing Workplace report, which found “almost one in 10 Australian workers had changed jobs in the past quarter and one in three over the past two years. With almost a quarter of Australians currently intending to leave their current jobs”.
So right now, a quarter of your employees are potentially thinking about leaving…
Is retaining your skilled staff members keeping you up at night? It should be!
It’s a generally accepted principle that the cost of staff turnover can be 6 to 9 months of their salary in hiring, training and lost productivity.
Even if they stay, Gallup estimate that the cost of a disengaged employee is around 18% of their annual salary!
To retain and engage people, leaders need to create a working environment that inspires and motivates people. A recent Deloitte survey asked Gen z’s and Millennials to list their top reasons for working at their current organisation. The top reasons respondents chose to work for their current organisation encompassed the themes of work life balance, growth opportunities, feeling valued and a positive culture.
Image credit – Deloitte, The Deloitte Global 2022 GenZ and Millennial Survey
Three Key Levers
For these things to be in place, it requires organisations and leaders who are thoughtful about the employee experience and are able to create the kind of environment where employees can flourish. Three levers that you can pull to ensure you have this kind of environment are:
Leadership Capability
Ensure your leaders operate in a way that demonstrates high levels of emotional intelligence and the ability to engage and motivate their people.
- Do your leaders bring out the best in their people?
- Do they connect with employees on a personal level?
- Are they able to unlock what motivates their people, to boost engagement and retention?
- Do they lead with self-awareness and by example?
- Do your leaders lean in to challenging conversations that are honest, productive and respectful?
Developing leadership capability boosts employee motivation and engagement, increases agility, unlocks potential, increases the organisation’s ability to deal with gaps in the talent pipeline and reduces the challenges associated with turnover. Great leaders attract, inspire and retain great people.
How are you investing in your people?
Organisation Culture
Understand the culture of your workplace, the behaviours that are rewarded and those that are undesired. Organisational culture has a direct impact on your company’s performance. In their 2021 Global Culture Survey, Katzenback Center and PWC found that 81% of respondents said that ‘culture is a source of competitive advantage’.
- How do your people feel when they come to work – what is your emotional culture?
- Does your organisation embody its mission and values?
- Does it have a collaborative or competitive culture and how does this impact on employee satisfaction and retention?
- How is failure addressed – with zero tolerance, or as an opportunity and a lesson to learn from?
- What dynamics are playing out within your leadership teams?
- What subcultures exist in your organisation and are they compatible with your overall organisational culture?
Assessing your company’s organisational culture is the first step to creating a stimulating work environment where your employees feel heard, recognised, respected, and safe, and where they’re productive and efficient.
Psychological Safety
The most important factor in building a positive culture is psychological safety.
Robert Kegan, a renowned psychologist and professor at Harvard Graduate School of Education, suggests that “High-performing companies have a culture that makes people feel safe enough to be vulnerable enough to learn and make mistakes while being able to stretch beyond their accepted capabilities.”.
As a starting point and to begin unpacking the level of psychological safety, Jean Marie DiGiovanna suggests that leaders ask their team members these seven questions:
- What’s the thing you see me doing that’s helping me best contribute to the team?
- What’s the thing I do that’s detracting from our success?
- What’s one thing I need to know about you that will improve our relationship?
- What’s one thing you need from me that will enable you to be successful?
- What’s one gift, skill or talent you have that I’ve overlooked, under-valued or under-utilised?
- What motivates you and how can we bring more of that to your work?
What else could you do to take positive steps towards building and increasing psychological safety in your team?
The Neural Networks team has been assessing, training, and developing emotionally intelligent leaders for over two decades and has extensive experience providing leadership coaching and training to organisations in almost every industry. We offer a range of options to help organisations develop leadership capability and a strong organisational culture.
References
https://kpmg.com/au/en/home/insights/2023/01/australian-business-leader-challenges-2023.html
https://news.nab.com.au/news/whats-going-on-in-the-australian-workforce/
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