Employee retention is indeed a critical success factor for organizations. When organizations are able to retain their top talents, they add greater value to their growth and performance. After all, in the contemporary world, it is hard to find exceptional talents that can drive massive organizational success.
This explains why modern organizations lay great emphasis on unique employee engagement and retention strategies. However, despite all the efforts, the engagement and retention levels remain far from satisfactory. Besides, there can be some negative dimensions of workplace culture that could add to employee turnover. Your organization’s issue of falling engagement and retention rates may have a lot to do with your company’s culture.
In this blog, we identify the most prevalent toxic workplace influences that can negatively impact employee retention rates. However, the corporate world is transforming at a rampant pace and you need to embrace the change accordingly. It is essential to look at how workplace demographics are changing before we analyze the factors affecting retention rates. Let us have a quick look at the demographic transformation in the modern workplace.
Changing workplace demographics
The demographics with respect to working generations are changing at a swift pace. To explain, millennials and Gen Z employees are briskly replacing baby boomers and Gen X counterparts.
Having said that, as a business leader, you need to acknowledge this paradigm shift. In fact, as per Deloitte, millennials will represent around 75 percent of the global workforce by 2025. Besides, the World Economic Forum asserts that Gen Z employees will account for more than 20 percent of the global workforce by 2025. So, clearly, millennials and Gen Z hold the key to the future of the corporate world.
It is your millennial and Gen Z talents that will drive your organization to new heights in the future. These generations are set to represent more than 90 percent of the global workforce in the near future. Hence, it is essential that we look at retention and attrition scenarios from their perspective. Your employee engagement and retention strategies need to be aligned with what millennials and Gen Z employees expect from their workplace.
Also, you cannot ignore the fact that these generations are known for high disengagement and attrition rates. Millennials and Gen Z folks are undoubtedly talented but their tendency to hop jobs regularly poses a great challenge for businesses. The subsequent section highlights the major factors that can cause high attrition among your millennial and Gen Z workers. So, let us get started.
Influences that can pull down employee retention levels
- Lack of appreciation
From baby boomers to Gen Z employees, appreciation is one of the most vital motivators. When managers appreciate their team members, motivation levels and engagement go up. Subsequently, there is also a direct correlation between appreciation and retention. To substantiate, as per HubSpot, 70 percent of employees say that they will work with greater zeal when their superiors recognize their efforts.
Moreover, according to Vantage Circle, more than 40 percent of employees quit their jobs due to a lack of appreciation. Besides, 66 percent of employees who receive adequate recognition are least likely to switch. These insights clearly validate the relationship between retention and appreciation.
Speaking of millennials and Gen Z specifically, they have a great expectation of appreciation. They expect their superiors to recognize their effort in a consistent way to feel valued. 80 percent of millennials feel that an increase in recognition will boost their loyalty to their organization. This vital insight by HR Dive explains the significance of appreciation in a millennial workforce.
Your millennial and Gen Z will always look up to rewards and recognition. In the absence of the same, they will feel a strong urge to switch. Having said that, for retaining your top talents, you ought to introduce a robust structure of employee rewards and recognition. Keep your people motivated through personalized rewards and see retention rates go up dramatically.
- Resistance to flexibility
Flexibility has become the new normal in this revamped corporate world. It is high time that organizations realize that resistance to flexibility can doom them. Especially in the context of millennials and Gen Z employees, flexibility is a key determinant of retention.
As per Forbes, 67 percent of millennials are of the view that flexible work arrangements enable a better work-life balance. In fact, Gen Z employees are equally keen on maintaining a healthy work-life balance. Besides, a Gartner Survey revealed that flexibility helps employees achieve greater productivity. More than 40 percent of employees feel that their productivity is higher in flexible work arrangements.
On the contrary, lack of flexibility can be a major reason for high attrition in an organization. As per Built In, 36 percent of employees consider quitting their jobs citing a lack of flexibility. Having said that, resistance to flexibility can cost your organization its most talented employees.
It is time you embrace flexible working cultures that are more feasible today than ever before. You need to acknowledge that if you are not offering flexibility to your employees, they have a large number of other organizations to choose from.
Most organizations today are happy to empower their employees with flexible work arrangements. Are you willing to pay such a hefty price for your resistance to flexibility? Let your employees find greater satisfaction in flexible work arrangements. The more you empower them the more they are likely to stay with you in the long run.
- Micromanagement cultures
One thing is certain, employees definitely do not love being micromanaged by their seniors. In fact, when managers resort to this style of management, it irritates employees and drives them toward disengagement. As you already know, this disengagement can soon turn into high turnover rates.
Besides, speaking of millennials and Gen Z folks, in particular, they definitely don’t like being told what to do at all times. The younger working generations expect greater creative liberty and trust from their employers and managers. Managers may have their own reasons for micromanaging their teams. However, it is true that it has a negative impact on employees and hinders their confidence.
In order to improve engagement and retention, you need to ensure that you denounce a culture of micromanagement. As a leader, you need to offer greater creative liberty and promote high trust in the workplace. You cannot always keep doubting your team members and supervise them after every hour, right? Let micromanagement make way for transformational and transactional leadership styles. This is where your organization needs a meticulous change management approach.
- Prevalence of favoritism
Office politics and favoritism often creep in no matter how much you try to avert them. You may not indulge in these negative influences and embrace them. However, these influences can exist in project teams and your senior managers may be guilty of them.
If you look at it from the perspective of employees, impartiality is the most basic expectation they have. Employees wish to have equal access to advancement and learning opportunities in the workplace without any bias. However, when employees fall victim to bias and favoritism, they feel discouraged and feel the urge to quit their jobs.
How would you feel if your well-deserved opportunities go to the people? You will feel disheartened for sure and infuriated at the same time. Similarly, your employees’ relationship with the organization will deteriorate drastically when they are subjected to prejudices.
As a leader, you need to lead by example to create an environment that is centered around the values of equity and equality. People should get their fair share of learning and advancement opportunities without any sort of discrimination and favoritism.
- Lack of transparency
As per Forbes, more than 50 percent of employees feel that their organizations are not transparent enough. To elucidate, employees feel that their leaders and managers withhold crucial company information. Further, this lack of transparency affects workplace relationships and causes major trust deficits.
When we look at the greater picture, the lack of transparency creates a toxic workplace culture. It demotivates employees and deteriorates their sense of workplace belongingness. When employees carry this feeling of alienation for a long time, they feel compelled to quit.
On the contrary, when you share valuable information with your employees, you can reap the positive benefits of it. Employees will feel more valued, trust will be higher and employees will feel inspired to make a positive impact. Therefore, making things transparent in a cautious way can certainly be the key to improved engagement and retention.
To encapsulate, workplace culture has a great impact on employee engagement and retention scenarios. Negative influences in the company culture can have a direct negative impact on retention levels. As a leader, you need to ensure that you identify these negative determinants and strategically plan to address them. Your effectiveness in addressing the above issues will determine how well your organization does to retain its top talents. Otherwise, your organization may continue to suffer from high attrition and the associated costs.