Employee satisfaction is a main element in the formula for reducing employee turnover. The understanding among most employers is that by offering competitive pay and strong benefits, they can create happy workers.
In a 2017 article, Gallup reported that there are five common factors that cause employees to leave jobs:
- Career growth opportunities
- Pay and benefits
- Manager or management
- Company culture
- Job fit
In other words, if you can manage to take care of these five factors, you can retain your talented employees and lower costly turnover.
When you look at these factors, it’s clear why training is such a fundamental component to employee satisfaction and retention.
Providing training means employees have career growth opportunities – they can upskill and re-skill to become more versatile and perform more responsibilities of higher value. It’s also an effective way to build a stronger company culture, especially when well-trained managers fully understand how they can affect team dynamics and performance.
To retain employees and strengthen your workforce, it’s important to understand what employees value and the components of employee satisfaction.
What Benefits do Employees Value the Most?
Quality healthcare is far and away the top benefit that employees value the most. According to a study by Metlife, 61% of employees who reported they were “very satisfied” with their company had attributed healthcare benefits as the reason for their satisfaction.
Unfortunately, employers must consider the average cost of benefits for employees, and while healthcare is highly important, it’s also highly expensive, with an average cost of $6,435 for single coverage and $18,142 for family coverage.
However, there are other benefits that are lower-cost to employers that can do a lot for your employee retention. A study by the Harvard Business Review showed that flexible hours and more vacation time were both taken under heavy consideration by employees when it comes to selecting and remaining with a company.
Offering these benefits will help optimize the benefits-side of the employee retention formula, but that’s not all it takes, so let’s talk about the other top factors in employee satisfaction.
Competitive Pay is a Baseline Consideration
A LinkedIn study revealed that 70 percent of professionals want salary to be among the first things they hear from a recruiter, and they want to hear about it from the first message. This shouldn’t be surprising – while other benefits certainly play a role in deciding where to work, if it’s not going to offer enough to pay the bills then it’s not worth the time and effort to pursue the job.
So competitive pay is understandably one of the first considerations employees make, but if you want workers who are happy in their roles and producing high quality results, there are factors just as important as pay for your company to offer.
As Nobel Laureate Bob Dylan once said, “the times, they are a-changing,” and that’s certainly true for pay and workplace culture. Research shows that millennials value fair pay less than Generation X and baby boomers do, while placing a higher value on the social impact their company has.
Offering competitive pay is important, but for high employee satisfaction, your organization has to take into account the greater impact that employees’ work has on society.
Developing Leaders and Managers Matters
If you’ve been on LinkedIn even once in the past couple years, you’ve probably seen the statement that people don’t quit jobs, they quit bosses. The reality behind turnover is slightly more complicated than that, but the statement has some truth to it – when we look at retention, and why employees leave jobs, it’s clear that the effects managers have on their employees matters.
Culture Amp looked at data provided by over 300,000 employees and confirmed that good management makes a difference, but there are larger factors that impact an employee’s commitment to stay with a company.
Their study suggested that job alignment, leadership, and learning and development were the most important factors in retaining employees.
They found that it wasn’t all about direct managers – it’s a combination of good management and good leadership that fosters commitment and creates happier workers. Only 22% of employees who have poor managers and poor leaders intend to stay with an organization.
Think about what this means for a minute – in a company with poor leadership and poor managers, four out of every five employees are waiting for their opportunity to leave. There is almost no way that a company with this challenge can be productive!
On the other hand, 89% percent of employees who say they have a great manager and their company has great leadership are committed to staying. Thus, if you’re analyzing your turnover and attempting to attribute your figures to a culprit, examining the employee sentiment to management and leadership is a great place to start.
Training managers and leaders is vital to the growth and continued success of any company. If your company struggles with poor management or leadership, view our free ebook “Developing the Coaching Skills of Your Managers and Leaders” right now!
Improving Company Culture
Company culture is directly related to your workplace values. It’s seen in the way things are done and the decisions that are made in an organization.
In a recent podcast episode, L&D Strategist Susan Daniel told us that her organization’s commitment to excellence is the key to their culture.All processes and all internal and external communications are driven by a dedication to excellence.
However, having workplace values won’t do much for your company if you don’t intentionally use those values to build a stronger culture.
Culture helps inform employees what types of behaviors are acceptable, how they can positively impact the organization, and what level of performance is expected throughout the company.
If you work in a fast-paced, competitive industry, you want people who are competitive and motivated to produce. If you work in an industry that rewards quality and creativity, you want to build a culture where employees feel free to experiment, to spend time thinking of solutions to big problems, and understand that patience will be rewarded. You also want a culture that recognizes how these attributes can differ across departments, and ensures employees are respectful in their inter-departmental interactions.
Having an intentional culture that is lived out in the workplace will help you attract and retain the right employees!
This one is common sense – employees want a job that aligns with their skill set. In fact, in a study that examined the top factors behind employee engagement, opportunities to use skills and abilities, the meaningfulness of the job, and the work itself were three of the top six factors behind employee satisfaction and engagement.
In other words, for employees to thrive, they need opportunities and roles where they can use and improve their skills.
To be sure this is happening, managers should be regularly meeting with employees and talking about the elements of their role that are most or least satisfying. That doesn’t mean they should stop doing the things they don’t like, but it allows managers to be aware of how employees could shift into new roles or how responsibilities could be better distributed for higher productivity.
Employee retention is one of the biggest challenges facing organizations today. You can increase employee satisfaction and create a happier workforce when you work to balance learning and development, competitive pay, workplace values, quality healthcare benefits, and leaders and managers who value the talent throughout your organization.