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Around 3.5-4 million Americans quit their jobs every month. Therefore, companies have to spend extra as they source, hire, and train new talent all over again. On top of that, a company with high turnover rates may suffer from a bad reputation, affecting its overall morale.
This article will highlight the importance of and discuss some employee retention trends to watch out for in 2024. Equipped with this knowledge, you can better safeguard your company's future.
What is employee retention and why does it matter?
Employee retention encompasses the overall efforts of an organization to keep its staff members from leaving. From a much broader perspective, it’s about building an environment where employees experience the three foundational Rs of employee retention: respect, reward, and recognition.
Employee retention programs can vary, depending on what the company lacks. Here are some examples:
- Implementation of peer-to-peer support groups or free counseling
- Integration of AI technology like AI image generators, AI slideshow makers, or copywriting software to automate tasks and make jobs easier
- Flexible and remote work setups
- Reverse mentoring, where employees give feedback to their superiors
Build these programs with the foundational values of employee retention, and enjoy the main benefit of better employee experience—recruiting top talent that sticks around.
Meanwhile, there’s a Gallagher report predicting the state of employee retention in 2024. It says that 57% of organizations expect an increase in workforce headcount. Employee retention remains a top operational priority, highlighting the need for companies to extend their efforts to prevent employees from leaving.
What are the employee retention trends in 2024?
Employee retention trends predict the future of work—the anticipated patterns influencing how employers can maintain their workforce, enhance loyalty, and increase competitiveness.
1. Learning and development opportunities
A workplace survey says that more learning opportunities can cause 94% of employees to stay longer at a company.
Want to leverage this learning and development (L&D) trend? Begin by focusing on one of the most crucial hiring steps: the onboarding process. It’s proven to encourage employee longevity (for up to three years!).
Create a continuous learning environment by offering digital learning platforms, cross-training, and mentorship programs. Should you want a more exciting, fun approach, you can organize free development workshops or pay for their out-of-town industry conferences.
These simple functions can empower employees in their career paths, making them more recognized and rewarded. A company with streamlined L&D can retain a more motivated, highly skilled workforce.
2. Assisting employees with well-being
With work-related stress affecting 80% of the workforce, it’s about time all companies start to recognize the overall well-being of their employees. The Chartered Institute of Personnel and Development outlines these crucial areas:
- Health: This isn't just about physical health. Mental health is equally vital. Initiatives and regulations that recognize mental health issues can make a significant difference.
- Good work: Setting an appropriate reward system—which we have a detailed guide for—goes a long way here. Good line management and a suitable physical working environment create an environment where productivity thrives.
- Values: Upholding and promoting the company's values encourages employee alignment and engagement.
- Social needs: Giving employees a voice and fostering positive relationships within the team to improve overall job satisfaction is essential.
- Personal growth: Implementing a continuous improvement plan lowers the chances of employee turnover over short periods.
- Lifestyle: Diet and physical activity programs can be the core of this factor. Some example efforts include recipe clubs, healthier choices in the cafeteria, and other exercise-related organizations.
- Financial well-being: Offering competitive compensation and guidance on personal finance management enhances financial security.
Addressing these areas of concern can be quite a big feat for any company. But you can start small, aiming first for mental health initiatives, an established reward system, and combining inclusiveness with workplace diversity.
3. Remote and hybrid work need to be the central focus
Many studies confirm the correlation between hybrid work setups and better work-life balance among employees - a combination that HR leaders believe to be a key driver in retention.
More and more people are aware of and prefer remote and flexible setups, and companies must follow this trend. Such work arrangements may have setbacks, including:
- Communication breakdowns
- Decreased team engagement
- Difficulty tracking employee productivity
- Managing different time zones
However, you can overcome the challenges of flexible and remote setups by building a policy that clearly defines where and when employees work. And, of course, leverage the use of technology.
In the US, 74% of companies have already adopted this work model, with approximately 59% of employees preferring to work in such companies, according to Zippia.
See our guide for remote work to learn in detail the techniques and tools you can use to foster better hybrid arrangements.
4. A skills-based approach to hiring
While many trends will change over time, one remains effective.
Many businesses are shifting from traditional hiring methods focused on degrees and past experiences to a more skills-based approach. In turn, this can also increase diversity within their teams.
Shift your focus to assessing specific abilities and potential during the hiring process; training can fill any gaps later. This approach can lead to a highly skilled workforce, and your new employees will feel more valued and appreciated for their unique abilities and contributions.
You can even apply your skills-based approach to the existing workforce. In that case, you can further refine data-driven employee retention strategies but also identify who requires upskilling or reskilling. It gives you a more proactive technique to drive employee satisfaction, professional growth, and retention.
In turn, according to TestGorilla, 92.5% of companies that use this approach to hiring have reduced the rates at which they hire the wrong candidates.
5. Personalized rewards and recognition programs
A customized approach to rewards and recognition significantly boosts employee engagement. 72% of employees who experience outstanding recognition say their organization commonly acknowledges "little things."
These individuals are 20 times more likely to be engaged than those who receive low-quality recognition.
Therefore, avoid a one-size-fits-all approach. Recognition needs to be tailored based on individual, generation, and industry, ensuring people are rewarded and acknowledged effectively for their unique contributions and roles.
6. Diversity, equity, and inclusion (DEI)
A majority of U.S. workers acknowledge the benefits of emphasizing DEI. Yet, a Pew Research study reveals prevalent biases, with many believing that being a man or White offers job advantages.
Counteracting these ingrained beliefs requires a comprehensive DEI approach that promotes fairness, acknowledges diverse strengths, and actively counters gender and racial biases to foster a fair and inclusive work environment.
7. Flexible benefits and perks package
There may be limited current data regarding the number of employees prioritizing benefits over salary, but there's clarity on what perks employees value most. Here are the top three and the corresponding population prioritizing them:
- Healthcare benefits (89%)
- Retirement plans that guarantee financial security (81%)
- Time-off privileges, promoting work-life balance (81%)
8. Revolution of AI to enhance the employee experience
AI is projected to revolutionize the US labor market, with anticipated boosts in overall productivity growth by 1.5% in the next decade.
Simultaneously, the marketplace for AI technology is on an upward trend, expected to hit a staggering value of a trillion dollars by 2028. It is already transforming workplaces in several ways:
- Automation of repetitive tasks: This technology can streamline routine tasks and free up time for more complex duties.
- Employee training and development: AI-powered learning systems can tailor training to individual needs, thus improving employee skills acquisition.
- Talent acquisition: AI can speed up recruitment by screening resumes and predicting candidate success.
- Employee engagement: Chatbots now respond immediately to employee inquiries, enhancing satisfaction and engagement.
Final thoughts
Employee retention is a fundamental aspect that businesses should prioritize. Losing an employee can cost around 33% of their annual salary. That’s up to $20,000 for every resigned staff who’s paid $60,000 per year.
By implementing some forward-thinking trends, you can reduce costs by retaining employees instead of constantly replacing them.
But beyond financial costs, you need to consider the value experienced and engaged employees bring. It reiterates the need for a robust employee retention strategy built on recognizing, rewarding, and respecting the teams.
Understanding and incorporating these employee retention trends into business strategies is essential as we gear toward the future. Whether it's about providing avenues for learning and development, valuing employee well-being, embracing flexibility, or adopting a skills-based approach, these methods can help build a more resilient, dedicated, and satisfied workforce, securing your organization's future.
