Turnover is costly. Gallup found that replacing an employee can cost as much as two times the employee’s annual salary[1] and Leadership IQ found that an astonishing 46% of new hires fail within the first 18 months.[2] So, it’s important to understand what drives employees to stay.
A recent report from the Great Place to Work Institute[3] found that three job elements were critical to retain employees: purpose, pride, and fun. Of these, “purpose” is the most important. People prioritize “meaning” in their jobs more than anything else. They want to feel they’re contributing to a cause greater than themselves or producing something significant or useful.
But the report also found that what’s meaningful varies drastically from one person to the next. This isn’t surprising. After all, everyone wants to feel important to someone or something, but humans are a diverse, richly nuanced group. So, what are companies to do when considering retention strategies?
Consulting firm McKinsey suggests starting with your organization’s purpose – the one thing you can control.[4] Make sure your mission isn’t simply a poster on the wall. Leaders need to live, breathe, and model the organization’s purpose in everything from their daily interactions to their most important business decisions.
Next, identify what your employees—the people you want to attract, inspire and retain—find the most meaningful. Start by asking them—all of them, from the top executive to the newest frontline worker. Open-door policies, surveys, workshops, roundtables, and small-group sessions are useful here. And follow through on your support for the issues your people highlight as important.
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