How to make your workplace more magnetic

Globally businesses have been feeling the pinch regarding talent shortages and high staff turnover, reflecting a significant shift in the power balance between employers and employees.

Closer to home this is no different, with the rising costs of staff turnover impacting Australian businesses. The Australian HR Institute reports that the cost to replace an employee is approximately 1.5 times their annual salary.

And with the time commitment, cost and loss of product knowledge that comes with losing a team member, it is crucial for leaders to understand how they can shift the Great Resignation to the Great Retention.

So what strategies can leaders implement to improve employee retention rates?

AIM WA CEO and social affairs and workplace expert, Professor Gary Martin FAIM shared his thoughts on how you can make your organisation more magnetic.

What are the common challenges that organisations face when it comes to staff retention?

Professor Martin highlighted that high staff turnover poses a significant challenge to business continuity, as organisations risk losing valuable institutional knowledge.

“If you don't have core people who know the foundations of the business, it becomes extremely challenging to drive progress forward,” he said.

“Losing key employees can also slow down any progress made and set the organisation back as well.”

Yet for Professor Martin, there are two perspectives to consider. When an organisation has an absence of staff turnover, it may indicate a lack of progression or innovation. This stagnant environment can lead to employees becoming complacent and resistant to change.

“Some staff turnover is desirable,” he suggests, “assuming you have got the right staff in place.” He further advised that aiming for a retention rate of 90 per cent is ideal.

“... When you have a foundation built of new employees who bring fresh perspectives, mixed with longer-term staff who share company knowledge, organisations can achieve both progression and stability while retaining its core,” he said.

What are some effective staff retention strategies that have proven successful in your experience as a CEO?

Effective retention strategies are pivotal for enhancing loyalty, productivity and staff engagement within an organisation.

However, there often exists a large disconnect between the desires of employees and what senior leaders think their people want, leading to a misdirection of resources and a significant financial impact.

Senior leaders play a critical role in employees feeling valued and fulfilled in their jobs. As the CEO at AIM WA, Professor Martin believes that to understand the culture within an organisation and employee pain points, you must encourage two-way communication.

“It’s important that any leader who has a senior role in an organisation stays in touch with what's happening on the ground,” he said.

“Sometimes when leaders assume more senior roles, there’s a tendency to stand back and become distant observers.

“... You must make sure you still hear what people have to say and see what they're doing. It's about keeping your ear to the ground about how people work.”

Drawing on this, Professor Martin referred to how he is addressing this at AIM WA by setting aside time with each employee in the organisation to encourage communication and gain a sense of what’s happening within departments.

“It's a significant undertaking,” he acknowledges, “but it draws out the general themes of things that are working well and the things that are working not so well. It also provides an opportunity to talk to people about their career progression.”

In addition to encouraging ongoing communication, Professor Martin advocates for the use of ‘stay interviews’. Rather than waiting to speak to employees when they decide to leave an organisation (coined as exit interviews), he recommends regular discussions to assess career aspirations and address any unmet potential.

Another strategy Professor Martin sees value in is identifying and leveraging the attributes that make your organisation attractive.

“It’s about seeing what opportunities are there for people to do something different from their regular job. For example, attending an external event,” he said.

“By offering additional opportunities, you can make your employees' experience of working in your organisation a little bit different and broaden their perspectives.”

How important do you believe professional development is in supporting staff retention?

To effectively retain staff, employers must prioritise valuing and nurturing their employees’ skills.

Professional development and mentoring opportunities are integral components in achieving this, as they lead to enhanced confidence, knowledge, skills and productivity within the workplace.

Professor Martin sees the value in professional development, yet for some organisations, it can often be one of the first areas targeted for budget cuts during tough financial periods.

“That’s okay in the short term, but in the long term, if you want your organisation to grow, you have got to develop your people,” he said.

Yet to be effective, professional development opportunities must be tailored for each employee to address their personal needs, stressors and motivation.

“Leaders must choose professional development that not only helps people do their job but also helps them to advance in their careers as well,” Professor Martin advised.

“Whether that's within your organisation or not, sometimes people don't retain staff because they don't want them to grow enough to get out of their organisation. So, it’s about having the mindset that you’re investing in people.”

While some organisations may view professional development as key attraction levers for prospective employees, they are actually baseline expectations rather than differentiators.

Professor Martin agrees that ongoing training should be a core factor for any successful business.

“Organisations are investing in professional development now more than ever because they recognise that people want to grow and develop, they don't want to stagnate and that's what happens when there's no training or development opportunities,” he said.

How can leaders foster a magnetic work environment, particularly when faced with industry norms of frequent job changes?

Professor Martin believes the core of fostering a magnetic workplace lies in identifying the distinctive benefits of each organisation.

Leaders must articulate what sets their organisation apart, enticing individuals to join and, importantly, encouraging them to remain committed once they've become part of the team.

One of the mistakes organisations can make is believing that employee happiness relies on what the company can provide in terms of functional benefits such as salary and recreational activities.

While not to be dismissed as lacking in benefits, insights from the Future of Work report show that it’s evident most leaders overlook prioritising emotional benefits to enhance employee wellbeing.

A surprising insight from this study was that a survey conducted among top executives across Australia found that none of them acknowledged their employees’ disengagement.

This is a stark contrast to the report finding that out of 1,800 employees within Australian organisations interviewed, 78 per cent reported feeling disengaged, highlighting a clear discrepancy between leaders and their workforce.

“No matter how many tangible benefits a company may offer, if people aren’t feeling respected then they won’t want to work there,” Professor Martin said.

AIM WA Chief Executive Officer, Professor Gary Martin FAIM

"While perks and incentives are valuable," he explains, “it ultimately is the work environment that keeps people retained.”

Touching on this, he discussed the importance of employee recognition and work flexibility, noting that people need to enjoy their work environment to feel fulfilled.

“Sometimes leaders feel that just because they may spend longer hours at work, they expect their employees to devote their full attention to their work instead of themselves,” he said.

“If that happens, automatically people don't want to come to an organisation. Most people don't want to come to an organisation that's going to control their life. They want a life as well.

“There can be nothing worse than coming to work and hating being there. Because it actually does destroy someone's life when they spend so much time at work.

“If you go to a job that you don't see any purpose in, you don't resonate with your colleagues or you don't get on with them for various reasons, then your whole life takes a different turn.

“So leaders must try to work out what makes people tick and try and make it an enjoyable experience for them so it's not just work. Yet at the same time, acknowledging that they're not going to give 24 hours to an organisation and it's not healthy to do so.”

What advice would you give leaders to enhance staff retention and ensure that valuable employees stay motivated and committed to their roles?

With the looming risk of losing valuable company knowledge that comes with staff turnover, Professor Martin advises leaders to foster a work environment that prioritises ongoing feedback, opportunities for career development and open communication to help maintain employee motivation and commitment.

“Leaders must look at what it is about their organisation that would make people want to work for you in the first instance, but also what makes them stay as well,” he emphasised.

Employees also need to feel supported in maintaining a work-life balance to prevent stress and burnout. Providing opportunities to mix up their daily activities, such as participating in external events, can also glean fresh perspectives.

“In essence, a magnetic work environment comes down to many factors, both tangible and intangible, that offer different advantages for employees,” he said.

However, he also advises leaders on the importance of striking a balance between welcoming fresh perspectives and retaining valuable talent. As without an influx of new ideas, an organisation may struggle to remain innovative.