Increasing Employee Retention in 2017
“The biggest priority, and concern, for business leaders in 2017 will be retaining employees in a competitive talent marketplace.” This quote, from Fortune.com, echoes the sentiment of talent acquisition leaders and HR teams across industries. Unemployment is hovering around the lowest rate in 9 years, and is well below the 68-year average of 5.81%. Combined with an increase in the gig economy, employee tenure and retention are due to suffer. Today, the most talented employees have easier access to better opportunities.
Employee Turnover & The Digital Revolution
Improving local economies and the rise in the gig economy factor into the struggle creating more and more revolving door companies. Referred to as “alternative employment arrangements” by the Bureau of Labor Statistics, this new segment of the workforce is gaining popularity. The increase is even more noticeable for for in-demand fields such as art, design, and IT. In conjunction with more customary “gigs” like construction and transportation, it isn’t difficult to see how this is causing a disruption to the traditional workforce. Employees now have more power to leverage and they are taking advantage of it.
The most popular gigs make it easy to start working using your own tools, your own car, and doing it on your own time. Companies like Uber and Takl have emerged and capitalized on the concept but it is still unknown how successful these companies will be at retaining their most valuable team members.
Catching the Boomerang Employee
A rise in “boomerang employees” has also lead to an increase in turnover. These employees, who leave an organization on good terms, eventually come back to a new role with new expectations. The problem is the trend of feeling that leaving and coming back is the best way to get a raise and promotion. Organizations with a high ratio of boomerang employees may need to address issues larger than retention.
LinkedIn founder Reid Hoffman explains the disconnect of modern employment in his book, “The Alliance” . Hoffman suggests that the employer-employee relationship is a dishonest one. Companies are asking employees to commit to the company, without reciprocating.
Thanks to a rise in the gig economy, employees are turning the tables and taking another opportunity before they are “rightsized”. An active employee referral program makes it easier to stay in touch with boomerang employees and could even boost engagement enough to keep them from leaving in the first place. Referrals could be the key to catching them before they move on permanently.
Employee Referrals Add Value and Reduce Turnover
Employers have renewed focus on employee referral programs and talent acquisition technology. It’s common knowledge that employee referrals are the most successful source of hire. Yet, 40% of organizations are not doing anything to speed up this new-hire source.
Have you considered employee referrals as a method to reduce employee turnover? In addition to reducing time-to-hire and increasing profitability, employee referrals are a great retention management tool. 46% of referred employees are still in their position at the end of year 1 (compared to only 22% from job boards). Referred employees are 37% less likely to get fired and 26% less likely to quit. An employee referral program could be the catalyst you need to boost retention in 2017.
Next-Generation Employee Referral Programs
Thanks to the digital revolution, many organizations are adopting new employee referral programs outfitted with the latest in algorithm and computer-matching technology. Buyer beware – All employee referral programs are not created equal. In fact, many of today’s next-generation solutions don’t rely on a good old fashioned person to person referral. Some don’t even offer a mobile app for employee referrals.
Automation can increase efficiency, however, there are some aspects of ERPs that cannot be computed by a machine. Employee referrals as a human process deliver educated and emotional insights. This isn’t reproduced by an algorithm. That is why organizations should choose employee referral platforms that take advantage of technology without undermining the employee referral program.
To learn more about the benefits of employee referral programs and how Lingo is changing the talent acquisition landscape, check out this article naming the Lingo employee referral app a top HR Tech company to watch.
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