Business Leadership Today

What Are the Challenges Leaders Face in Finding and Retaining Great Employees?


Matt Tenney, Author of Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process

Recruiting and retaining talented, highly-skilled employees is essential for an organization’s success. 

But what happens when organizations are experiencing turnover on a monumental scale? This is just the scenario we find ourselves in today.

Many have been quick to blame all the job-hopping on Millennials, but here are a few eye-opening statistics: 65% of Gen Z workers stay in a role for less than one year, and they’re more than twice as likely to leave their current position in the next month (13%), compared to Millennials (5%), Gen X (3%) and Baby Boomers (6%).

The job seeking habits of younger workers indicate that retention will likely continue to be one of our greatest challenges and that sustainable financial growth and success will depend on our ability to rise to the challenge. 

How can organizations convince employees who are thinking about jumping ship to stay? 

Unfortunately, there is no easy, one-size-fits-all answer to the question of what organizations can do to retain employees, but we know that the retention strategies we employ in the future need to take into account the reasons why employees are quitting.

The challenges leaders face in finding and retaining great employees include employee dissatisfaction with the compensation offered, ineffective leadership, no or few advancement opportunities, lack of recognition, failure to provide job clarity, the need for more autonomy, and toxic work environments. 

In this article, we’ll examine these challenges and provide some tips for how to overcome them. 

Dissatisfaction with Compensation

While other factors are certainly contributing to an increase in turnover these days, compensation, including salaries and benefits, is still the main driver of turnover.

An organization that does not offer a decent salary and benefits that are attractive to potential employees will struggle to recruit talented employees. After employees are hired, they won’t stay without a salary that keeps pace with the cost of living and will be apt to seek out job opportunities with organizations that offer more money and better benefits.

Organizations may think that fair, equitable compensation isn’t doable for them financially. But when you consider the costs associated with turnover, and that poor compensation is one of its main drivers, it’s clear that it will be difficult to maintain a heavy bottom line if an organization can’t recruit and retain good employees.

Beyond equitable pay, offering benefits that meet employee needs and address the issues that are causing them to leave gives organizations a competitive advantage. 

When employees’ needs are met, they are more likely to stay with an organization. Being well-compensated, through pay, benefits, and other employee perks, for the work they do motivates employees to do their work well and inspires greater loyalty.

Ineffective Leadership

Leadership plays a pivotal role in both engaging and retaining employees. 

The duration of an employee’s tenure is primarily determined by the relationship they have with their direct manager according to a 25-year study by Gallup, with about 50-70% of an employee’s perception of their work environment linked to the actions and behaviors of management.

Ensuring that leaders at all levels within the organization are modeling core values and forging trust-based relationships with staff is an important component of any organization’s retention strategy. This process should begin at recruitment. 

Hiring for cultural fit is always good for retention, but it is also good for succession planning. When management positions open up in the future, you may already have a good candidate pool within the organization if you’ve hired for cultural alignment. 

Investing in leadership development for your top talent and offering career pathing and other professional guidance is a great way to hold onto employees with the skill set the organization needs, to ensure the organization’s cultural DNA is not lost due to attrition.

No or Few Advancement Opportunities

Many employees will feel dissatisfied in their roles and more likely to leave if they aren’t progressing professionally or if they don’t see any room for advancement in their current organizations. 

Employees need to feel that they are growing professionally and developing their skills and intellectual capabilities. Employees who feel they are growing in their jobs are more likely to be engaged in their work and more likely to stay.

Research has shown that employees who spend time learning on the job are 47% less likely to be stressed, 39% more likely to feel productive and successful, 23% more able to take on additional responsibilities, and 21% more likely to feel confident and happy.

To keep talented employees, you have to let them know they have a future in the organization and that leadership is invested in them. 

Offering learning opportunities that help employees advance, either through in-person or online training, tuition reimbursement, or leadership development and helping employees chart their career paths are just a few ways employers can boost retention.

Lack of Recognition

Employees thrive on recognition. When their contributions aren’t recognized, this lack of recognition can end up nudging them toward another job.

Praise can be a powerful motivator. Business leaders may not realize how important praise and recognition can be for employees, but it really does offer an array of benefits for organizations and their teams. 

Psychology tells us that praise is the primary source of positive reinforcement, the process of modifying behavior for a more positive result. Leaders can use praise to recognize and reinforce positive behavior in their employees.

For recognition to be most effective, it should be genuine, specific, and consistent. Recognition, when done right, demonstrates to employees that leadership is paying attention and that they also value the work employees do. 

Failure to Provide Job Clarity

When employees are unsure about what is expected of them in their roles, it creates a situation where they experience conflict on a daily basis about their duties and responsibilities. 

It starts with a job description. Many organizations use the same old job descriptions from one hire to the next, without reevaluating them to determine how things have changed with the role or how it may change in the near future. 

This becomes even more important in difficult times (such as the COVID-19 pandemic) when responsibilities and duties may shift regularly. 

It’s essential for employees to know what is expected of them, clearly have new duties and areas of responsibility clarified for them as the situation changes, and be made aware that the work they do is seen by leadership.

Organizations should revisit job descriptions regularly and should always ensure that employees are clear about what is expected of them in their roles. Regular one-to-one conversations can be a great way to clarify job duties. 

The Need for More Autonomy

Autonomy has been identified as a major factor in the job-seeking habits of workers, with 42% of Millennials indicating they would choose a job that allows them to work independently on projects of their choice. 

Offering flexibility (when possible) in work schedules is the first step to equipping employees with the tools they need to work with autonomy.

Allowing employees to work from home gives them the flexibility to take better care of their families and personal needs—employees are better able to do this when they aren’t having to spend hours every week making those long commutes to an office to do work they can do just as easily from home.

Autonomy isn’t just about allowing (and trusting) employees to work remotely when possible. 

It is also about believing in and trusting employees to do the work well, independently or as a member of a team, and supporting an environment of accountability where employees can take ownership of their roles, identify their strengths and improve their weaknesses, and see the way their work impacts the organization as a whole.

Toxic Work Environments

One of the biggest drivers of The Great Resignation has been toxic work environments. An analysis conducted by the marketing platform Conductor found that searches for “toxic work environment quiz” increased 700% in April 2022. 

All the scenarios outlined here—dissatisfaction with the compensation offered, ineffective leadership, no or few advancement opportunities, lack of recognition, failure to provide job clarity, and the need for more autonomy—can lead to toxic work environments because they can cause significant dips in employee morale. 

Understanding that all these issues can lead to toxic environments that are inhospitable to engagement and retention is the first step to forging retention strategies that work. 

Avoiding toxic work environments requires leaders to be intentional about culture and cultivating work environments that help employees to thrive. Toxic work situations should be dealt with swiftly when they arise. 

Implementing retention strategies that are aimed at meeting employee needs and creating a positive work experience for employees will ensure that your organization can both engage and retain the best workers. 

Matt Tenney has been working to help organizations develop leaders who improve employee engagement and performance since 2012. He is the author of three leadership books, including the groundbreaking, highly acclaimed book Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process.

Matt’s ideas have been featured in major media outlets and his clients include numerous national associations and Fortune 500 companies.

He is often invited to deliver keynote speeches at conferences and leadership meetings, and is known for delivering valuable, actionable insights in a way that is memorable and deeply inspiring.

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