From our interactions with our clients and research, we know that one of the biggest challenges HR professionals have faced over the years is employee retention.
Whenever an employee resigns from the company, there will always be a ripple effect in the workplace. Existing team players who have to take on additional job responsibilities in the interim may feel overwhelmed with the extra workload. If the person who left the company is an inspiring and motivating leader, the rest of the team may follow suit. Some will choose to leave if they believe that the next hire will not be able to do the same job effectively. These problems are likely to escalate if the position is left vacant for too long.
As a general estimate, the cost of replacing an employee is approximately one-fifth of their annual salary and this tends to increase with each progressive level of seniority.
Having a loyal and engaged workforce has a positive financial impact on the business as it supports the growth of a strong leadership pipeline - which is critical to secure the future of the company. Job seekers also tend to assess how happy your employees are based on the organisation’s attrition rate. A low employee turnover rate indicates that employees are happy, engaged and satisfied with their job.
In order to develop a robust employee retention strategy, companies need to understand the key factors behind workers’ decisions to leave or stay.
why employees quit their jobs?
People tend to leave a company because of various push and pull reasons. As employers, we have very little control over the pull reasons, but we can always look internally to minimise the push factors. We surveyed 4295 employees and job seekers in Hong Kong SAR in our latest Employer Brand Research and found that people wish to leave their jobs if they lack visibility of their future with the organisation
top three reasons why Hong Kong SAR employees will walk away from their current jobs:
1. Limited career path
2. Work-life balance issues
3. Low compensation
how to retain good people?
It is known that when employers deliver on what their people value and expect from the company, the turnover rate will reduce. However, what’s important to one individual may not be equally valued by another.
According to our research findings, employees in Asia Pacific choose to stay with the employers because of three key reasons - salary, work-life balance and job security.
top 3 main reasons why employees stay in the company:
1. salary and benefits
Paying your people a fair salary will help them focus on what really makes them happy at work. Even though salary can be a sensitive topic to discuss in the Asian culture, employers should do their part to ensure that their staff understands the full value of their salary and benefits. The mutual understanding fosters a greater sense of appreciation for their remuneration package and builds the employee’s trust in their employers.
2. work-life balance
In the six years that we’ve conducted the research in Hong Kong SAR, we’ve noticed that employees and job seekers are placing a higher importance on work-life balance.
Work-life balance is not about having agility. It is about having the opportunities to develop their careers while achieving their personal milestones as well. Companies need to understand where work sits in an employee’s life and find out how much of their time is spent on work compared to how much time they actually want to give to work.
Employees who are able to strike a balance between work and life will demonstrate greater commitment and pride over the work that they do.
3. job security
When an employee doesn’t have a clear career trajectory, it can negatively impact their engagement and overall performance.
Nobody likes surprises. People want to know what is happening in the organisation and how it will impact them. As employers, we need to strive to create career paths for our people.
In a talent-short market like Hong Kong SAR, employers need to think about how they can positively impact people’s working life if they want to retain stand-out staff.
We encourage leaders and HR professionals to look at an employee’s career and personal aspirations holistically to develop an effective employee retention strategy, tailored for each individual. This approach will help future-proof the organisation, generate goodwill among staff and have a positive flow-on effect on your employer brand and business performance.
complimentary download: ‘enriching your employee experience’ white paper.
Our 2018 white paper will help you gain new insights on what it takes to motivate people to join your company and why employee experience is the future of work.
The white paper covers the following:
- importance of investing in employee experience
- mapping the employee experience journey
- key employee motivators and detractors
- reimagining the employee value proposition
- solution-focused design to create the best employee experience fit
we can help you.
As employer branding and HR experts, we combine both global knowledge and local insights to help you transform your employer brand into the most powerful attraction and retention tool you have.
Whether you are interested in elevating your employee experience or understanding how you can use our research to drive more effective workforce strategies, we can help.
Contact your Randstad consultant or email us at hongkong@randstad.com.hk for a confidential discussion.