Australia’s skills shortage

Finding quality talent in the current job market is like finding a needle in a haystack. With the events of the past couple of years, most people are content staying in their current workplaces unless they have obvious reasons to fly the coop. This has created a skills shortage in many Australian industries. In some cases, businesses are having to source talent from interstate or upsize their benefits packages. KPMG expects Australian businesses to feel the effects of this shortage for another three to five years, meaning that employee retention has never been so important! Some other reasons why retention initiatives are important are:

Retention improves workplace culture

An employee’s resignation can have a ripple effect across teams, departments, and even entire businesses. Decreased productivity and morale are the most common effects due to changing team dynamics and responsibilities. Thankfully, many activities that aim to improve retention also strengthen workplace culture – which is a win-win for everyone! This will be touched on a bit later.

Retention saves money and time

With the average cost of hiring ranging between $9,700 and $35,000, improving retention is a sustainable way to reduce overall business costs. It also improves efficiency by reducing the time and energy spent hunting for talent and minimising disruptions to work output.  

How to improve retention

Now that we’ve covered why retention is important, we can get into what you’re really here for – proven ways to improve retention.

1. Focus on culture

While yes, salary is important, but it isn’t the be-all and end-all. In fact, research has found that having a poor company culture is “10 times more important than pay in predicting employee turnover”. While culture is a broad topic (probably a topic for another day), initiatives that improve diversity, morale, teamwork, equity, and relationships should improve retention. However, a pizza lunch isn’t going to fix a toxic culture. Start at the root problems and worry about the fun things later.

2. Celebrate the wins

Employees want to feel valued – simple as that. Developing a culture of recognition, where wins are celebrated and contributions are acknowledged, is a great way to keep employees engaged. Some ways to foster this culture include:

• Publicly recognising achievements through awards, shoutouts, or praise
• Giving employees autonomy and the opportunity to take on responsibility
• Provide employees constructive feedback on request

3. Provide training and development opportunities

When somebody feels stagnant or bored in a role, they’re likely to look elsewhere for progression and development opportunities. While vertical progression is a great way to keep quality talent engaged, it isn’t always an appropriate option, especially for smaller businesses. Offering training and development opportunities is a scalable alternative, which can be as simple as sponsoring employees to attend industry seminars or complete training programs. The results are twofold, as you’ll likely also see an improvement in work quality as their learnings are put into action.

4. Touch base regularly

People say “what you don’t know can’t hurt you”, but this isn’t the case when it comes to retention. Unless you’re a mind reader, it can be difficult to tell when an employee is considering dipping their toes in the job market. Oftentimes we find out when it’s too late… when resignation notice is handed in. Touching base with employees in one-on-one settings takes the guesswork out of this. Official meetings, coffee catch-ups, or even walking meetings can be great opportunities to find out what employees are enjoying and what they’re struggling with. Now that there’s clarity about their experiences and feelings, there’s an opportunity to address any issues before they escalate.  

5. Provide competitive salaries and benefits

As touched on earlier, salary isn’t the be-all or end-all when it comes to employee satisfaction and retention. However, employees who are paid less than the industry average are more likely to be open to new opportunities than those who aren’t. While this is more relevant to businesses with poor cultures, no business should ignore the impact of salary. As such, it’s important to keep up to speed on industry trends and adapt your remuneration and benefits strategy accordingly. If this isn’t possible, follow the other tips in this blog to develop other initiatives that increase workplace satisfaction.

Looking to find and retain quality talent? Contact us today.