LEGAL
By Pam Loch, Employment Law Solicitor and Managing Director of Loch Associates Group
HOW TO STOP THE RISE OF THE ‘TURNOVER TSUNAMI’ AND PROMOTE LOYALTY Over the last twenty years, employee loyalty has been on a slow decline, which is not expected to stop. In fact, the Covid-19 pandemic has only exacerbated this with workers challenging the traditional ways of working and wanting more flexibility, increased security and better salaries. If an employer cannot meet these new expectations, a significant percentage are willing to resign. In 2021, the Achievers’ Employee Engagement and Retention Report found that 52% of employees were planning to search for new jobs within the year. A significant proportion comes from some top-paying companies, demonstrating that competitive pay is not the only motivating factor in being loyal to a company.
and ‘pull’. Push factors stem from inside the organisation and can be anything from bad leadership to a lack of career development opportunities or feeling undervalued. Currently, push factors play a huge part in the ‘turnover tsunami’, so it is vital to complete exit interviews and analyse why your staff are leaving to improve these areas and retain staff.
Multiple adverse effects come with a high staff turnover rate. Therefore, it’s essential to understand your employees’ needs early on to prevent this. The recruitment process can be costly and interviewing, onboarding, and training distract staff from their day-to-day tasks, ultimately reducing productivity. Most importantly, when a team member chooses to leave, the business loses the corporate knowledge that the individual held.
Other situations outside your control, such as Brexit and the Ukraine-Russian war, have exacerbated the already rising
When looking at why employees leave, you can separate the causes into ‘push’
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Pull factors are external influences that entice employees away from your company. In the last two years, a significant factor has been the attraction of a new work location. The Covid-19 pandemic has allowed many people to re-evaluate their living situations and move away from busy cities.
cost of living. The UK has seen energy costs increase by 50% in April 2022, and petrol costs skyrocket to 163.5p per litre, 16p higher than the previous month. Salary increases aren’t keeping up with this, making employees more prepared to search elsewhere for a business offering higher salaries. In the past, the baby boomer generation found that hard work and loyalty were clear pathways to progression and promotion, but now with the talent pool being so saturated, this isn’t the case. Millennials, who now make up the largest percentage of the workforce, understand that the most reliable way to increase their pay and expand opportunities is to switch jobs. After seeing this method benefit millennials, baby boomers have begun to follow in their footsteps. There are ways you can promote loyalty within your business and increase employee satisfaction. The most apparent is offering a competitive salary, but may not be in a financial position to increase salary funds. Matthew Killingsworth, who studied happiness, stated that ‘money allows people autonomy to choose how they live their lives. However, there are other ways to encourage loyalty.’ So what are they?
