Understanding talent retention

Is the Great Resignation making way for the Great Stay? Voluntary quits have declined from 43.3 percent of workers in 2023 to 38.5 percent in 2024, indicating a workforce shift. Post-pandemic, employees seem to be choosing to stay at companies longer.

Retention and turnover are among the trends discussed in iHire’s 2024 Talent Retention Report, which surveyed over 2,000 U.S. workers and employers. Below are the key findings HR leaders need to know.

Why employees leave: Pay isn’t the top concern. The leading reason employees choose to leave a job, selected by 32.4 percent of employees who quit their job this year, is a toxic or negative work environment, followed by poor company leadership (30.3 percent) and dissatisfaction with one’s manager or supervisor (27.7 percent). Surprisingly, unsatisfactory pay ranks sixth (20.5 percent), just behind poor work/life balance (20.8 percent).

This suggests that employees often prioritize a healthy work environment, strong leadership, and positive relationships with managers over salary. HR leaders need to continue prioritizing company culture and work/life balance.

Employer vs. employee views on why employees leave: A significant gap. While 32.4 percent of employees who left their job cited a toxic work environment as the top reason, only 15.3 percent of employers noted it as a factor. This highlights a substantial disconnect between employers’ perceptions and employees’ experiences.

When employers who had experienced turnover were asked why their employees left, the top three reasons they selected were personal reasons (51.4 percent), a role better aligned with career goals (42.0 percent), and unsatisfactory pay (36.3 percent) as the primary reasons given by departing staff. HR leaders can ensure exit interviews are a standard practice at their organizations to better understand the reasons behind employee turnover.

Why employees stay: Balance and culture over pay. When surveyed on workplace culture, a significant majority (83.4 percent) of employees valued a positive work environment, while 68.1 percent indicated they were more likely to stay if their employer prioritized work/life balance. Additionally, when asked about workplace flexibility, 54.7 percent reported they’d be more inclined to remain with an employer offering flextime.

Employees prioritized health insurance (68.1 percent) and retirement plans (59.9 percent) as key retention benefits, with many also desiring career growth opportunities such as professional development (60.6 percent) and promotion pathways (56.3 percent). This indicates HR leaders need to continue prioritizing company benefits packages to retain workers.

Employees willing to trade pay for balance, culture, and flexibility. When asked which perks might lead them to accept a lower salary, 50.9 percent of employees indicated they’d do so for better work/life balance, while 44.6 percent would consider it for an improved work environment or company culture. Additionally, 40.8 percent said they’d accept lower pay in exchange for greater work flexibility.

This highlights a growing preference for nonmonetary benefits in employee retention strategies, signaling that HR leaders must prioritize holistic well-being initiatives, foster meaningful work experiences, and offer flexible workplace options to enhance employee satisfaction and loyalty.

5 strategies for HR leaders to enhance employee retention. Based on the employee retention statistics, here are actionable strategies for HR leaders to engage and retain top talent:

1. Don’t rely solely on salary as a retention tool. HR leaders should adopt comprehensive retention strategies that emphasize flexibility and foster a positive work environment, such as flextime or hybrid work options.

2. Prioritize work/life balance and flexibility. Respect employee boundaries by avoiding after-hours communication and by encouraging employees to block off personal time on their calendars to prevent burnout.

3. Foster a positive environment and an inclusive culture. Ensure your organization’s vision, mission, and values statements are in alignment.

4. Offer advancement and growth opportunities. Provide professional development workshops and access to e-learning courses for remote employees.

5. Empower employees to use AI and other new technologies. Train staff on best practices for utilizing AI tools to enhance efficiency. Also, make sure to set clear AI policies.

Source: SHRM.

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