Today’s workforce is very different to what it was a decade ago. The number of people voluntarily leaving their jobs is on the rise, giving HR professionals a new challenge when it comes to talent retention: navigating the ‘quitting economy’.
The current shorter workplace lifespan is even more evident among the younger generation. Deloitte’s 2018 Millennial Survey found that 43 per cent of millennials plan to quit their current job within two years. Moreover, a recent report from Tech Nation revealed that job vacancies within the tech sector are at an all-time high in the UK. This is compounded by the fact a number of industries are facing a shortage of skills – meaning the competition for HR to find the best people and keep them is more fierce than ever.
As talent retention and recruitment become increasingly fundamental for driving a competitive business advantage, the role of HR is shifting from an administrative function to a key part of the decision-making process. Within this new environment, HR teams need to completely rethink their approach to attracting and retaining the best and brightest talent – and this requires an in-depth understanding of the workforce.
The cost of the ‘quitting economy’
If a valued member of staff leaves, the time it takes to find a suitable replacement isn’t the only cost to a company. In fact, the financial impact could add up to around twice as much as the leaver’s salary if you factor in recruitment costs, a fall in productivity and increased training investment.
Let’s also not forget the potentially negative influence this can have on workplace morale – particularly if that person was influential within the business. The impact of a talented individual resigning can send shockwaves throughout an organisation, resulting in management changes and team reshuffling.
Regardless of the role the leaver had, it’s likely the team will have to make up for some of their workload. And even when a replacement is found, they will need time to settle in, receive training and learn how to work effectively within their new team, which also takes time away from managers as they learn new skillsets.
Obtaining a holistic view of the workforce
While it may be difficult to completely overcome the effect of the ‘quitting economy’, there are proactive steps HR teams can take to reduce its impact significantly. This revolves around not simply measuring how many people have left the company, but really understanding who and why, as well as gauging the overall sentiment of existing employees.
To attain a ‘Google Earth’ view of the workforce, HR professionals are increasingly turning to people analytics – a field of data science which involves collecting and interpreting accurate employee data to pinpoint user behaviour and predict and prevent problems early.
By gleaning valuable insights from this data, HR can answer business-critical questions such where their best employees are coming from, why people are leaving the company and how their current workforce is feeling.
Innovation in retention
When it comes to using people analytics for talent retention, traditional methods do not hold up. In other words, HR teams cannot solely rely on annual employee reviews and legacy HR tech to gather the necessary information from data to evaluate employee satisfaction. Put simply, people analytics requires a shift in ethos towards data science and HR tech.
In practical terms, employee data needs to be centralised from across the entire organisation, combining every department. While it is important HR teams receive training on how to use people analytics, it is vital that the whole company develops a data-driven mind-set. It should therefore become routine for employees and managers to input the right information into the relevant system.
Fortunately, there are many new people analytics solutions on the market that are simple to implement and that automate many admin-heavy tasks for HR teams, allowing them to focus on strategic decision-making. And while switching to a data-driven approach may require some up-front investment, the return will dramatically outweigh the resulting losses that come with an important member of staff leaving.
Proactive HR – retaining talent ahead of the curve
People analytics is only effective if HR teams and organisational leaders analyse and act on insights in a strategic and timely fashion. If executed well, businesses can use the results to take a data-driven approach to stemming the flow of the quitting economy.
One proactive method to weathering this new environment is to comprehensively map the workforce. This exercise can be used to reveal connections between departments and highlight who the real influencers are – who people would go to if they had a problem, for example. More tellingly, using data to map employees can also uncover where there is a risk of disconnection such as problematic existing structures or broken lines of communication. This then allows HR teams to make informed decisions and improvements.
In many cases, a small, pre-emptive alteration can make a difference when it comes to retaining employees, such as knowing about a worker’s commute or their likes and dislikes. A person’s identity at work and after work is important for building a picture of an individual. By utilising information from accurate data, HR can make enhancements to day-to-day elements of work life culture.
Staying one step ahead of the ‘quitting economy’
In an environment that is constantly evolving, HR teams play an integral role in ensuring companies of every size maintain a competitive edge. The underlying issue is not simply about knowing the workforce, but really understanding them. Who are the irreplaceable employees, the internal influencers and what exactly will it take to make them stay? Knowing this will enable HR to reduce the impact of a more transient workforce and weather the ‘quitting economy’ storm to ensure their businesses not only survive but flourish.