At the Leadership Summit I highlighted the three main areas business leaders need to major in, each of which has three key components which in turn comprises of three parts. One of these 27 parts is a Retention Strategy.
According to a report by Oxford Economics, the cost of replacing an employee averages £30,614. This figure is derived from two main factors: the cost of lost output while a replacement employee gets up to speed plus the cost of recruiting and “onboarding” a new member of the team. This disturbing picture is made worse when you consider that over 25% of the UK workforce has been in their current job for less than two years, (the UK has one of the shortest average tenures in the developed world). The position is set to get even worse when you note that Generations Y and Z (or Millennials if you prefer) change jobs more frequently than Generation X’s change their cars. And to cap it all there aren’t enough of them to go round, demand for talent is already outstripping supply in many sectors and is forecast to get worse.
It is therefore essential that you have a Retention Strategy in addition to your Recruitment Strategy. The key question to be answered is how do you hang on to the very best people when they have a propensity to change jobs and will be headhunted daily by your competitors and other sectors? The answer isn’t just pay them more, although no doubt you will be as a wage explosion is potentially on the cards. No, what keeps Generations Y & Z engaged is their opportunity to develop within an environment and culture that causes them to feel proud and to have perceived high status among their peer group.
This is easier said than done. You need to have a continuous development programme in place, not just on the job training, that encourages and assists, indeed goes further and inspires people to fulfil their potential. You also need to create a culture that your team boasts about to their peers, that gives them a position that’s envied, (this is also essential to attract the talent in the first place). Additionally Generations Y & Z want to have friends at work, to be part of a team, to belong and to do meaningful work that aligns with their values.
For the last 50 years business was all about winning the hearts and minds of the customer, now that’s not enough. First and foremost you’ve got to attract, develop and retain the very best people for your team.
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