Global FinTech recruiter Storm2 recently put together a compelling presentation on employee retention in the FinTech field. An emphasis is placed on understanding the reasons why people leave a company and the potential cost that this can have to the company. According to Accounts and Legal, it costs on average a whopping £12,000 to replace somebody who has left a small business, a figure based on a number of factors, including the cost of hiring somebody new, productivity lost from the person who is leaving, a new employee joining and the recruitment process. So let’s do the maths. If you are a small business of only 50 people, even a 10% employee turnover a year, being five staff members, could cost you £60,000 a year!
Storm2 consultants spoke to 2000 candidates looking for new opportunities to try and find out the main reasons they had for leaving their previous employment as well as understanding their interest in new opportunities. A number of candidates mentioned lack of progression and looking for new challenges as their reasons for leaving, while outdated technology was also a factor. Lower on the scale was poor or no training programs, lack of flexibility or lack of security. Surprisingly however, was the top reason for leaving: company culture.
Storm2 did some further research on why people leave their current company and came up with the following statistics:
Their research also showed that a poor onboarding process could double the staff turnover rate (Digitate), while a strong learning culture could increase staff retention rate in companies by 50% (Robert Half).
The cost of replacing a good employee is staggering, and many people cite company culture as a primary reason for leaving. So it is integral to put systems in place to ensure that employees don’t feel this reason for wanting to leave. Storm2 offered further discussion on how to retain employees and avoid staff turnover.
The question that should be asked is, why so many employees leave because of company culture, when at some point they made a conscious decision to work for that company? Storm2 believes that the reasons could be that they weren’t made aware of the company culture or it wasn’t explained properly and therefore didn’t match up to expectations.
Of course you need to show your company in a good light when you interview a future candidate, but at the same time you need to make sure that you show it realistically. If you are worried that being too honest might put off the sort of candidate that you are trying to attract, then perhaps it is time to investigate your own company culture and make some changes to make it realistically more attractive. It is also important to ensure that all your recruiting and onboarding material matches up with how you present your company culture, as well as training all staff members in your company culture and then ask new candidates to explain their perception of your company culture and see if it aligns. Then you know that you are doing it correctly!
Another important tool in maintaining a high retention rate is a training program. Whilst this can be time consuming and costly, Storm2 cites a strong learning culture as contributing to a fifty percent higher retention rate so it is worth the effort and cost, and of course your employees will also be equipped to do their jobs to their full potential. You could choose to outsource training or put someone in charge of learning and development to initiate this process.
One of the reasons that Storm2 found for leaving was feeling undervalued. Giving your employees regular feedback shows that you are prepared to put in the time to develop everyone and that they are important to your company. This should at least consist of a monthly feedback session, allowing both yourself and your employee the opportunity to add valuable input as to how things are going and where changes may need to be considered. This will also make you aware if the employee is looking for new challenges, which would allow you to give them more responsibilities and add to their role before they try to find this elsewhere or before it is too late.
How do you know what rewards to offer to keep your staff as a whole motivated? The most obvious solution is to ask. Storm2 suggests you organise a small focus group across the business to share ideas. Another idea is to talk to other companies and find out what rewards they offer, for example flexible working hours or part-time working from home. Having clear and regular steps to progress is also a huge motivator, as can be seen in the percentage of people leaving their jobs seeking a clearer view of where they can progress and not having to wait too long to move ahead. It’s important for your team to see themselves progressing at least every two years or less to keep them motivated. This could even consist of mentoring opportunities or leading projects.
Storm2 agrees that it’s always a good idea to have various standard staff reward options in place to keep everyone motivated, but it’s equally important to know individual staff members and what might motivate them on a personal level. For this reason it is imperative that management meets with individual staff members to get a better understanding of what they might be looking for in the job and their career as a whole. This could help you to decide on a course of action to keep them motivated, such as a training course or personalised working hours. Storm2 suggests that even something as simple as knowing someone’s coffee order could go a long way to saying thank you and acknowledging someone as being an individual that is part of the whole.
According to Storm2, “people don’t leave companies, they leave managers''. Of course it is more complex than this, but most employees report to a manager and how they actually manage could have a huge impact on staff retention, be it positive or negative. Managers need to be trained to understand and adhere to work guidelines, as well as understanding and communicating the company culture to prospective employees. They give the example of flexible working hours - it is all very well to offer this as a staff benefit but staff will be left feeling disenchanted and unfairly treated if a particular manager of a department denies this option. It is worth investing some time and money into management training in order to retain good employees.
Understanding company culture is integral to keeping employee retention rates high. In their report, Storm2 emphasises the necessity for a checklist to help everyone understand exactly what this company culture is and what is expected. Use this checklist to help clarify your company culture in interviews and throughout the onboarding process. Ensure that everyone acquainted with this description and that it is on all recruitment and onboarding material. Part of this checklist could include regular feedback sessions between employees and management, as well as to establish what rewards your company would offer in order to keep your employees motivated. Clear progression opportunities should also be written out so that everyone understands how they can move ahead. Finally a well-designed management training protocol would also go a long way to ensuring employee retention.
Understanding and maintaining a positive rewards-based company culture doesn’t have to be a difficult thing. Keeping staff motivated, through reward and recognition is a sure-fire way of ensuring that they stay and don’t move on to seek new opportunities for growth or flexibility. Making sure that management is trained up and that there are plenty of opportunities for growth and development is key to a happy, productive staff complement. For more ways to improve your employee retention, today.