Why is employee retention important?
In the past, it was common to work for one company for a long time or even for life. Nowadays, however, there is a completely different wind blowing in the labor market. Employers are finding it increasingly difficult to find and convince employees. This is leading to an increase in vacancies. The search for qualified employees is time-consuming and job advertisements often remain unfilled for longer. In view of the growing supply of jobs and the increased negotiating power of qualified applicants, employees are increasingly willing to change jobs.
In these times, it is crucial for companies to retain their employees and counteract staff turnover. It is therefore essential to invest time and resources in employee retention.
Understanding employee retention - the 4 levels
Most companies recognize the importance of employee retention. In order to achieve this goal, it is first important to understand what retains employees and where to start. For this reason, a theory of the 4 levels of employee retention has been established. It deals with the different levels on which a connection to the job can be established.
The 4 levels of employee retention:
1. The rational employee retention
2. The habitual employee retention
3. The normative employee retention
4. The emotional employee retention
Rational employee loyalty is based on facts such as salary, benefits, social services and development opportunities.
Habitual employee retention arises from habit. Many employees prefer the familiar environment, even if the working conditions are not ideal.
Normative employee retention is associated with a sense of duty. This can be the case in family businesses or when a manager does not want to let their team down. It is based on the conscience of the employees.
Emotional employee retention results from employee satisfaction. If the work is enjoyable, meaningful and the working atmosphere is pleasant, an emotional bond to the job is created.
You can read more about the theory of the 4 levels here.
Successful employee retention in practice
At Schulmeister, we are aware that satisfied employees are more productive and perform better. Employees who stay with the company mainly out of habit or a sense of duty may have performance and motivation problems. It is therefore important to focus on the emotional level when it comes to employee retention. And in order to retain employees emotionally, employers need to make sure that they feel comfortable in their job.
You can read more about employee retention, necessary measures, strategies and implementation in an interesting article from betriebsausgabe.de
Despite all the efforts companies make to strengthen employee loyalty, mistakes do occasionally happen. Here are 5 no-gos to avoid that can have a negative impact on your employees' loyalty:
Attention: 5 big mistakes you should avoid
1. Wrong approach
Measures such as home office options, flexible working hours or training opportunities are positive and can have an impact on both a rational and emotional level. However, it is important to consider where your employees' needs lie. Would a single mother of three possibly prefer flexible working hours or organized childcare instead of training opportunities? It is worth having individual discussions and addressing specific needs.
2. False promises
Be careful with promises that you may not be able to keep. Nothing has such a negative impact on employee satisfaction and retention as empty promises. For example, if employees have to wait a long time for a promised promotion or salary increase, this can have a demotivating effect and affect their loyalty to the company.
3. Neglecting the financial aspect
Although money alone does not make you happy and other factors are important for the long-term retention of employees, appropriate pay is crucial. Especially on a rational level, a slightly higher salary compared to competitor companies can have a positive effect. It is therefore important not to neglect salary increases and bonuses in addition to benefits.
4. Misappointments in management positions
According to a survey conducted by the opinion research institute forsa on behalf of XING E-Recruiting in 2022, 28% of employees resign due to the management behavior of their superiors. It is therefore important to be particularly careful when filling managerial positions or positions with personnel responsibility. In the worst case, a wrong decision can lead to qualified employees leaving the company.
5. Fake reviews on Kununu
When it comes to attracting new talent, the viewpoints and testimonials of current employees are a valuable tool for shaping a company's external image. In particular, reviews on platforms such as Kununu can influence the decision as to whether someone applies for a job or not> Read more about this here. But caution is advised: Fake employee reviews written by the employer themselves are quickly seen through! Instead, companies should use the "Comment as an employer" function to respond to negative (or even positive) reviews. This creates a more authentic and transparent image of the employer. It is also not advisable to explicitly ask employees to leave overly positive reviews, as this can also lead to negative reactions. Instead, you should make sure that your working conditions and atmosphere are top-notch so that your employees give positive - and above all honest - reviews on their own.
