10 Employee Retention Myths Busted

With employment in Australia at all-time highs, employee retention is a major issue in most organisations

10 Employee Retention Myths Busted

With employment in Australia at all time highs, employee retention is a major issue in most organisations. This White Paper is the product of several years of research and breaks new ground in understanding and dealing with the issue of Employee Retention.

Myth 1 – HR are accountable and should have fixed it

This is the pervasive myth, HR are accountable for employee turnover and should have fixed it. Our research indicates that HR cannot fix it, they can only influence employee turnover. The people with the greatest influence over employee retention are Line Management. Line Management typically influences 40-50% of the reasons why employees leave an organisation.

Myth 2 – They left for more money

This is the response often provided by managers when an employee resigns. The truth is that remuneration on average only constitutes 12% of the reasons why employees leave an organisation.

More than 40% of the reasons why employees leave are directly related to their Line Manager and the employee’s perception as to how they were managed.

Myth 3 – Managers know how to manage retention

Managers are typically very poor at managing retention. If they knew how, the problem would not exist. The issue for HR is why are Line Management poor at managing employee retention? There are several reasons why Line Managers are poor at managing retention. These are:

  1. Line Management are typically not accountable for employee retention. They view it as an HR function or someone else’s problem. Therefore they don’t do anything about it as they feel someone else is responsible for this function.
  2. Line Managers are typically subject matter experts in their line of business. They have never been trained in how to manage staff, let alone employee retention; therefore they don’t manage retention and don't have the skills to manage retention.
  3. Line Managers only have visibility of their own teams. A manager loses two of her eight staff and does not think it’s a big issue. This however represents 25% turnover and across the organisation is probably costing hundreds of thousands if not millions of dollars per year.

Myth 4 – We can fix it by packaging our salaries more effectively

Given that remuneration only constitutes 12% of the reasons why employees leave, re-packaging salaries will have a marginal effect on employee turnover. Many organisations don’t have the flexibility or the time to do this for every employee and at best only repackage salaries for their top 2% of employees.

Re-packaging remuneration therefore leaves 98% of the organisation without a solution for employee turnover.

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