All you Need to Know About Employee Retention in 2024

Retention starts with an impression. Today, over 60 percent of employees favor job-hopping. Moreover, data from the U.S. Bureau of Labor Statistics has shown that four million employees have voluntarily left their jobs since January 2022; and the numbers keep rising. 

Such an alarming level of voluntary turnover, which is costly to the organization, showcases organizations' retention issues and the lack and clarity of employee retention strategy.

When it comes to retention strategies, you’ve heard them all: Free sporting event tickets, complimentary fitness memberships, hefty compensation packages, etc. But perks and pay do not address the underlying problems. Instead, it’s the empty promises and values that drive employees away.

Millennials, the largest growing workforce, expect integrity, fairness, and transparency and pursue purpose, job flexibility, and professional development overpay.

First impressions drive retention

An employee’s first impression can make or break the relationship like any first impression. Your company’s recruitment and onboarding processes are not only the first impression touchpoints of recruitment but also the first finger-holds of employee retention.

A reliable employee value proposition (EVP) is proven to attract, engage, and retain star talent. EVPs represent everything of value that an employer provides to its employees. However, most organizations treat their EVPs as a one-hit wonder. A momentary success may bring talent through the door, but it often fails at making loyal fans.

EVPs are never signed, sealed, delivered, and done

Typically, organizations forget that an EVP is a continuous and evolving plan. It must be “realistic, differentiating, and authentic,” with periodic revisions that align with employee needs and expectations. Importantly, it must be supported by management and align with company marketing messages.

Many businesses market EVPs such as journey maps, professional development programs, business resource groups (BRGs), and telecommute options, yet they have no accountability system. For instance, offering professional development or BRGs is futile if employees are denied the time to partake.

Worse, studies show that negative first impressions are enduring and difficult to change. An EVP is more than bait. It must be promoted, permitted, and supported if you plan to keep your catch.

Case study

A technical support services company offered a compensatory day to employees who continued to work another shift after working their full day. However, management failed to reassign the employees’ regular customer workload; thus, their duties were compounded once they returned from the compensated day. Incentives like this are counterproductive. They lead to employee burnout, disengagement, and attrition.

In addition, recruitment content, company values, and mission statements that are inconsistent, overstated, or marginalized manifest as broken promises and value incongruence.

For example, “a company may boast a deep commitment to CSR and green policies when their activities extend as far as donating to charities.” For employees who deeply value CSR, this deviates from the values the company originally advocated. All these can lead to negative attitudes, decreased performance, buyer’s remorse, and eventually voluntary turnover.

Consequences of value incongruence

Employees are quick to spot value incongruence, especially in the wake of Enron and Well Fargo, who falsely touted values of integrity and ethics. When companies say one thing but do another or fail to keep their end of the bargain, employees tend to reciprocate. Scandals are not the only cause of outrage.

When employees are initially offered training or flexible hours and later find that management either denies, ignores or delays it, they experience incongruence between actions and words and often blame the organization for obstructing the goals they expected to reach.

Gallup reports that many companies offer professional development and “flexible policies that simply never get used because their culture implicitly directs employees away from taking advantage of those perks.”

Many employees feel unfairly treated after realizing that the EVP they “bought” is deterred or denied. When employees feel deceived, they usually overgeneralize and collectively perceive management, the organization, and its policies as hypocritical.

This not only deteriorates the psychological contract it can trigger negative bias. People inherently latch onto the first information or values they receive and compare it to the present to make decisions. Consequently, when employees sense inequity, they tend to anchor to negatives and perpetually detect other discrepancies.

For example, if the job description states “any employee is eligible for flex work” but later the hired candidate is denied it or sees that the employee policy handbook says, “not every job lends itself to flextime,” the employee will likely feel misled. Once the psychological contract breaks, employees are more likely to reciprocate by withdrawing discretionary effort, lowering performance. Like a self-fulfilling prophecy, when employees withdraw effort, it further obstructs their potential for flex work.

At this point, employees may not only want to leave, but they may also excessively call in sick or take other liberties as they feel the company owes them for the aggravation and for misleading them. Eventually, they begin looking for other opportunities, or they are terminated.

Negative bias, disengagement, and employee turnover can be minimized by keeping EVP promises and focusing on the good. Instead of feedback that centers on employee mistakes, reinforce the positives within your company. Emphasize what employees have done right. While recognition and rewards are essential, it’s also important to establish trusting relationships and elongate positive employee experiences.

Way forward

Trust, openness, and prolonging the positives are up to leaders. Having employees share positive moments by asking, “what went right today?” is beneficial in team meetings. But behind closed doors, also ask employees, “what went wrong today?” Doing so fosters ongoing communication and provides the building blocks to form trust. To prevent value incongruence and determine a realistic and sustainable EVP, analyze and close the gap between the explicit espoused values and implicit values and norms enacted within the organization.

Whichever approach you take, the EVP, job description, marketing content, corporate policy, culture, and management approach must align. This sets expectations for new hires, paves their way for success, and weeds out those who won’t fit, reducing costly turnover.