A LinkedIn retention study reviewed 32 million profiles to discover why employees remain in their jobs.
Sometimes, when the seemingly elusive is revealed, such an epiphany is less of a surprise, but rather a palm-to-forehead moment. In other words, it just makes sense. Such is the result of a just-revealed retention study conducted by LinkedIn, which reviewed 32 million profiles (of its 660 million members), and concluded just what it is that keeps employees loyal, and why they remain in their jobs.
The most foundational takeaway from the LinkedIn report:.
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Does the demand for tech employees keep employers on pins and needles?
With, it's clearly a challenge keeping star employees away from the competition. The data suggests a 76% likelihood of an employee still being at the company after a year. After two years, it drops to 59%, and after three years, the number is abysmally less than half, 45%.
Justin Black, head of people science at Glint Inc./LinkedIn, said that industry competition was less of a factor, and added that, "In fact, we see the same fundamental needs expressed across all industries: A sense of fit and belonging, alignment to company goals, enablement to do great work, making an impact, and growing professionally."
Tech companies are well below industry attrition average
But Black also acknowledged that, "We see plenty of leading tech companies who track well below the industry attrition averages. They're able to create attractive cultures because, hey, guess what, people care about more than just money. They want to be in jobs that don't feel like work and expand their professional capital."
The 32 million LinkedIn members whose data made up the study have been working since at least 2013, and work for companies with more than 500 employees. Data was gathered through July 2019.
LinkedIn likened its study to a life insurance company's calculation, the "survival curve," which is basically the probability of you being alive at any given point in time. LinkedIn applied the calculation to employee retention to find out the odds of someone staying at one company, and cites three factors that are.
Employees who change positions are more likely to stay (promotion or not)
On Wall Street, apparently greed is good, but in the real working world, change is good. Those who change jobs within the company are very much more likely to stay than those who stagnate in their original position.
Surprisingly, it apparently makes no difference if an employee is promoted or moved laterally into an entirely new function. A new position, nearly any new position, is linked to greater retention. And what's closely aligned with retention? Engagement. The concept of career (growing professionally and satisfying career goals) is one of the greatest motivators for engagement, a concept applicable throughout the world.
The study found that an employee promoted by three years has a 70% chance of still being at the company, and someone who moved laterally, has a nominally less chance, at 62%. However, someone who remains, in those three years, in the same position for which they were hired, has only a 45% chance of still being at the same company.
Internal movement, therefore, is strongly linked to greater retention, no matter if the move is lateral or to senior. This supports the "tours of duty" concept popularized by LinkedIn co-founder Reid Hoffman in which employees repeatedly take on new roles in a company to gain operational experience across multiple areas.
People want to be on the move and feel they have a trajectory forward, and apparently even a lateral move denotes a positive change. Don't let your employees stagnate.
Companies with high-rated management saw better retention
"Those in the talent space have heard this truism a thousand times: People don't quit their jobs,," a LinkedIn rep noted in a release. "Our data seems to bear that out."
LinkedIn surveyed its members about companies they've either worked at or interacted with and were asked to rate the company across 14 employer value propositions (EVPs), which include "good work-life balance," and "a purposeful mission."
Companies that rated highly, in the top 5%, for "open and effective management" saw significantly greater retention. For businesses with low-management scores (bottom 5%), there was only a 32% chance of an employee lasting three years.
Managers set the tone, facilitate the vibe, create the office culture. Managers matter. Managers really matter. People are more inclined to choose situational over money. Yes, you read that right. LinkedIn cites a 2017 study that found 56% of its employees would turn down a 10% raise to stay with a great boss.
Likewise, Research published in the Harvard Business Review in 2017 examined eight management behaviors including:
- recognizing excellence
- teeing up challenging but achievable goals
- sharing information broadly
All behaviors promote trust. "Compared with employees at low-trust companies, 50% more of those working at high-trust organizations planned to stay with their employer over the next year," HBR concluded.
More than half of departing workers report that neither their manager, nor other company supervisor had a conversation with them about job satisfaction or future goals. Effective managers are good communicators who boost company retention.
Empowered employees are loyal employees
If an employee is given more responsibility and influence, they will be less likely to walk away from it.
LinkedIn took its EVP survey and compared it to the retention data, and the result was that companies perceived to be places with employee influence had workers who stayed in their jobs longer. Less empowering company's employees had only a 35% chance of celebrating a three-year work anniversary.
Employees want to be autonomous. They don't want to be micromanaged. Employees want control over their work,, and want to be acknowledged for their accomplishments.
A company's success is directly linked to its retention
The Bureau of Labor Statistics reported that last year saw the highest number of people quit their jobs in the US, in the last two decades. A Gallup poll called voluntary employee turnover a trillion-dollar problem for US businesses.
LinkedIn asks businesses to consider that:
- An employee who is promoted was 55% more likely to stay at a company, compared to someone who remained in the same position; someone who made a lateral move to a new function was 38% more likely to stay.
- An employee who works at a company with a reputation for having an open and effective management was 50% more likely to stay at that company for three years, compared to someone at a company which scored low on open and effective management.
- Someone at a company where employees are empowered was 34% more likely to stay for three years, as opposed to someone at a company perceived to give employees less influence and autonomy.
In summation, LinkedIn suggested:
- keep employees engaged
- open up untapped opportunities for more employee mobility
- provide effective management
- give employees more influence over their work
"To compete for talent, employers need to be intentional about investing in managers through integrated engagement, performance management, and L&D [learning and development programs]," Black said. "These managers will grow to be the ones that empower their employees and make them feel empowered. Once you crack it, it's a virtuous cycle."
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