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The world we are living in is changing every day, and so are employees’ priorities. What would you put on a scale to decide which is the best company for you? As an employee, it could be more flexibility, more challenges, or simply good health insurance. As an employer, you might ask yourself the same question for other reasons.
Retaining top talent is a fundamental step of your journey as a team leader. Hiring new employees costs money and time; The Society for Human Resource Management (SHRM) estimates that employers can absorb six to nine months of an employee’s salary to replace them.
For our grandparents, it was common to find a good and stable job and keep it for at least thirty years. Nowadays, the ever-growing digitalization and the global pandemic are shaking the rules of the game. It’s more common than ever to jump from a company to another or handle multiple projects at once. In turn, this has given rise to The Great Resignation, where employees are searching for better opportunities after they’ve had a year of lockdowns to contemplate their career paths.
After a year of the pandemic, hiring remotely to pick the best worldwide talent is an ordinary routine. But the fact that you can hire everywhere doesn’t make it easier to retain top talent. Therefore, it is essential to learn the different HR skills for effective HR management.
What is Employee Retention in Remote Teams?
Retaining top talent means finding strategies to engage your employees and build a stable relationship.
Retention rate is usually calculated on an annual basis with the ‘stability index.’ The percentage results from dividing the number of employees with one year or more of service by the number of staff in those positions the previous year. Employees hired during the year aren’t taken into account.
The basic formula to calculate the retention rate in a company is:
# of individual employees who remained employed for the entire measurement period / # of employees at the start of measurement period) x 100
Depending on the company scale, you can add different variables to the equation, having a full picture of the work conditions and employment rate. For example, companies like Amazon reportedly have exceptionally high employee turnover. On the other hand, Buffer records a 94% retention rate in 2.4 years; GitLab has 85%; BuySellAds 90%; and Zapier 94%.
Why is Retaining Top Talent Important?
Living in a world of fast transformation, with no geographical limits to hire, it sounds useless to bother about retaining top talent. If great candidates leave brand leaders like Google and Amazon, why worry about retaining them?
To start, companies of that scale can afford a constant change in staff. For smaller teams or startups, finding new candidates has more of an impact on budget and team productivity.
Revenue Loss
A turnover in the middle of a project costs on average 150% of the employee’s base salary. In addition, Dev Skiller calculates an average of 43 days to hire a software developer. Without considering onboarding and training, only the hiring process costs you two months of work - and an average cost of $33,251.
Productivity Loss
Finding a replacement doesn’t only impact the HR budget. Besides recruiting costs and time for conducting interviews, onboarding and training employees slows down your team. Other colleagues will need to spend extra time correcting and training, losing productivity and efficiency.
As a team leader, employee turnover means paying extra hours or hiring a temporary replacement, decreasing their overall performance.
Bottlenecks & Burnout
Covering a knowledge gap takes from one to two months, while your team needs to work more to make up for it. The risk is to overwhelm your existing members and lose other people.
Kronos and Future Workplace report how burnouts negatively impact retention - 95% of HR leaders reported that burnout is the first cause for turnovers. Keeping healthy team dynamics helps avoid stagnation on bottlenecks and critical issues, decreasing turnover rate.
For this reason, after you have your employees, you need to take care of them. You can do so by starting a workplace wellness program. They’re a critical tool for HR teams to increase engagement and decrease absenteeism and turnover.
Why Do Employees Leave Their Company?
There are millions of reasons why employees (whether remote workers or in-office) decide to leave their companies. You can be a big corporation paying high salaries, and there’s a chance that employees still choose to leave. Or you can be a small company and lose employees as well.
The question is, why?
Their Boss
As we said initially, working for a leading brand doesn’t mean that employees will last long. And there is a simple reason if you still have doubts about it. On a daily basis, people don’t work with brands but with their bosses.
Employees might stay with leading brands to build up CVs, but that doesn’t mean that they are willing to stay there to contribute to the company’s growth. As a team leader, you need more than a fancy brand logo to keep your team together.
Gallup found out that:
- Over one million workers listed lousy management as a top reason to leave a job,
- Of which 75% left voluntarily because of their boss.
Likewise, CareerAddict interviewed 1,000 workers.
- 79% of them consider bad leadership as the first reason to quit.
- 4/10 would return to a previous position only if the manager was replaced.
Lack Of Flexibility
To attract and retain top talent, most companies are incorporating and expanding their flexible options. Especially after the global pandemic, newly remote employees expect more flexibility with their work arrangements and the ability to work from home.
If 70% of millennials consider leaving a job, more flexibility is a shared request in all age groups. According to the SHRM survey:
- More than half of companies recorded a rise in employee requests for workplace flexibility.
- Three-quarters of companies approved the majority of those requests.
Besides flexibility, these difficult times have been a battleground to test remote arrangements. As a result, 95% of employees are willing to change their work habits to work remotely. In addition, Gallup’s research found out that 37% of workers are willing to switch to the work from home option.
Zero Challenges
Lack of career growth and development is another key reason for employee turnover. According to the Dice survey, besides higher compensation (71%), the primary reasons to leave job positions are:
- Better work environment (47%)
- Career advancement (32%)
- Seeking more opportunities to express creativity (26%)
In short, people want to be challenged, and it’s fundamental to leave room for development and improvement.
No Care For Mental Health
Mental health became a hot topic during the pandemic. Despite its benefits, this sudden shift to remote work, combined with endless quarantine, was challenging for everyone.
On the positive side, companies became more aware of their employees’ mental health and wellbeing and how it affects employee engagement. In turn, leaders have begun looking for ways to promote workplace wellbeing.
Research on the impact of poor mental health on employee performance has a long history. Studies from Deloitte and Business in the UK showed how mental health issues cost employers a total of £42 billion each year. Around £8 billion of these expenses goes to recruitment costs to replace those who left because of mental health issues.
The attention for poor mental health concerns any age or gender. Without surprise, the CV-Library survey found that six in ten men want to quit their jobs because of their mental health. Three in five employees have experienced work-related mental health issues, which is one of the top reasons to leave a company.
Little Appreciation
Another primary reason why employees leave their jobs is a lack of appreciation. The Office Team found that:
- 66% of employees left their job because of a lack of appreciation.
- Among millennials and young workers, numbers got even higher; nearly 8/10 millennials look for new opportunities because they don’t feel appreciated.
Having an employee recognition program is a crucial strategy to retain top talent in your remote team.
Bersin & Associates study recorded a 31% lower voluntary turnover rate when team leaders reward and appreciate their teams.
Best Strategies To Keep Top Talent In Your Remote Team
Each team is unique. However, some core values should be the foundation of your strategies to retain top talent. As we have shown through numbers and stats, the main reason to leave a company is a lack of:
- Trust,
- Challenges, and
- Long-run perspective.
Trust, of course, doesn’t mean being blind to mistakes or never questioning your colleagues about low performance. Trust in the workplace is more about:
- Treating people with respect
- Being competent and transparent
- Creating equal and fair dynamics among team members
With a healthy environment, you can challenge your employees with productive competition and new projects.
Finally, it’s essential to make your team part of your company’s growth and goals. Give your team a clear overview of your expectations and how to use and improve their skills to hit the target.
If employees know that you are willing to enhance their skill set to achieve your goals, they will be happy to stay as long as they can.
5 Practical Tips To Retain Top Remote Talents
1. Improve Management
As we mentioned initially, the first reason to leave a company is a lousy boss. Micromanaging, lack of flexibility and no room for personal initiative lead to a higher turnover rate. After all, would you like to be in a work environment where you’re constantly watched and forced to justify everything you do?
Instead, give autonomy to your team members. Rather than counting their hours, value their output and the quality of their work.
Be transparent about your expectations and the goals you want to achieve with the company. If you hire top talent, leaving room for initiative is the best way to build a loyal and productive relationship with your remote team.
2. Flexibility and Discipline
Flexibility and hybrid options are crucial elements to consider to retain top talent. Whether you are a hybrid or fully remote company, you can combine regular meetings with autonomous work.
As long as the job is done correctly and people are around when you need them, where is the point of denying remote options and a flexible schedule?
3. Space For Creativity
As we mentioned earlier, people want challenges.
Of course, it’s always impossible to make this type of statement, expecting that everyone agrees with it. But generally speaking, employees like space for creativity and new ideas.
During brainstorming sessions, you can encourage new ideas or methods to improve internal documentation. Your team members will feel engaged with your company’s growth, as they can adjust processes to their habits and needs.
4. Care of Mental Health And Healthy Work-life Balance
Especially in virtual teams, a team leader must pay attention to the psychological state of team members.
Even from a distance, it’s possible to create moments for casual conversation and social engagement. In the alternative, you can provide meditation and yoga sessions or cards nights. Each team is unique, but there is always a strategy to bring everyone together.
Check out this article on virtual team building activities to get more ideas.
5. Reward & Collective Recognition
Last but not least, appreciating the quality of deliverables is essential to retain top talent. Rewarding exemplary workers is one way to do this without overspending. A great example of a company that does this is Progressive Insurance. Progressive offers its employees a Safe Driver Discount which provides them with liability insurance and full coverage car insurance. This shows that the company values its employees’ contributions and wants them to be safe while driving.
No one likes to work for someone who takes for granted someone’s care and attention to detail. In the long run, everyone would end up losing passion, decreasing the quality of performance.
Why would you focus on the fine details if your superiors make it clear they care more about speed than quality?
On communication platforms, create channels to appreciate tasks and performance, or simply be grateful for your colleagues. And, never forget to celebrate significant achievements!
Finding And Keeping Top Talent Through Mentorship
Retaining top talent doesn’t only save you money and time. It drastically impacts your team’s productivity and individual performance.
For that reason, consider starting a mentorship program within your organization to retain top talent.
There’s a strong case for how mentorship leads to higher levels of employee retention. Randstad, for example, saw that employees participating in the mentoring program were 49% less likely to leave.
Giving employees an opportunity to connect with senior leaders or more experienced colleagues can make a world of difference for employee growth and development - especially for remote employees who struggle with connecting with leaders and colleagues.
Why wouldn’t you have a mentoring program in your organization?
To learn more about remote mentorship download our Remote Mentoring Handbook:
Costanza Tagliaferri is a Writer and Content Marketer at DistantJob and ThinkRemote. She has covered a wide range of topics, and now she is focusing on technology, traveling, and remote work.
