The Key to Employee Retention for Professional Services Firms

Talented employees are a company’s most valuable asset. However, retaining them is a challenge for most organizations today. According to market data, the average employee turnover rate in 2023 was 41%. What’s more shocking is that this rate was a whopping 57% for professional services firms.

There’s no denying that employee turnover can be disruptive for any organization. It can result in a decrease in productivity, sales loss, increase in recruitment expenses, and other undesirable impacts. A high rate of staff turnover can also impact the morale of existing employees. That’s why companies need to prioritize employee retention.

So, what is employee retention? It refers to an organization’s ability to reduce turnover by fostering a positive work culture.

Well, retaining employees isn’t a magic trick. Rather, you have to follow a multilateral approach that focuses on employee engagement and appreciation. This blog explores the key aspects of employee retention in professional services and offers strategies to boost the same.

Let’s dive in!

Also Read: How to Calculate Employee Retention Rate in Your Organization

Why Do Employees Leave Professional Services Firms

Employees may leave an organization for several reasons. By identifying the underlying causes, you can implement effective employee retention strategies. Here are some of the major reasons behind employee turnover at professional services firms:

1. Demanding Workloads and Long Hours

In today’s competitive business landscape, employees often have to deal with intense workloads, long working hours, and unrealistic deadlines. These can result in stress and burnout, causing employees to look for alternate job options.

2. Lack of Career Growth Opportunities

Talented employees attach a lot of importance to skill development and career growth opportunities. According to a market study, about 74% of employees are likely to leave their organizations if such prospects are missing.

3. Inadequate Compensation and Benefits

Another reason is the lack of competitive compensation and benefits. Underpaid employees often feel demotivated to continue in their existing jobs and look for better opportunities.

4. Unhealthy Company Culture and Poor Work-Life Balance

An unhealthy company culture impacts the mental and physical well-being of employees. It can also lead to a poor work-life balance, thus driving employees to switch jobs.

5. Feeling Under-Appreciated and Undervalued

Lack of recognition and appreciation by the company leadership can make employees feel undervalued. This can cause employees to become less engaged in their jobs and explore other job avenues.

Also Read: Best Employee Retention Strategies to Keep Your Best Talents

What Are the Key Drivers of Employee Retention?

When it comes to employee retention, you can adopt several best practices to drive home the desired results. This is regardless of your company size. Let’s take a look at some of the key drivers of retention:

1. Building a Positive and Supportive Work Culture

positive work culture can go a long way to make your employees feel connected to the organization. It can also enhance job satisfaction.

  1. Fostering Open Communication and Transparency: Communication plays a crucial role in developing trust and transparency within a workplace. By encouraging employees to share their concerns, ideas, and feedback, you can ensure two-way communication and address issues effectively.
  2. Investing in Employee Well-Being Programs: Investing in employee well-being programs boosts morale and reflects your commitment to providing the best work environment for your employees.
  3. Recognizing and Rewarding Achievements Publicly: Formal recognition and rewards serve as effective means to appreciate employees and celebrate their performance and achievements. They help to motivate employees and boost productivity.
  4. Encouraging Collaboration and Teamwork: A collaborative work environment encourages employees to develop bonds with their peers. It boosts a sense of camaraderie and inspires them to perform better as a team.

2. Providing Growth and Development Opportunities

With effective growth and development opportunities, you can help your employees to attain new skills and enhance their career graph.

  1. Offering Mentorship Programs and Leadership Training: Leadership training and mentorship programs can prepare your employees for higher roles within the organization and help align employee skills with organizational goals.
  2. Supporting Continuing Education and Skill Development: In today’s ever-evolving business landscape, it’s important to update employee skills. By educating and developing their skills continuously, you can boost their confidence and empower them to tackle new challenges.
  3. Matching Projects With Employee Interests and Skillsets: This approach creates a win-win situation for your employees and organization. It facilitates your employees’ efficiency, thus resulting in enhanced productivity for the organization.
  4. Encouraging Participation in Conferences and Workshops: Through these strategies, you can enable your employees to become experts in their fields. Such efforts on your part can contribute towards developing a growth mindset in your employees.

Employee Engagement

3. Ensuring Competitive Compensation and Benefits

A competitive compensation package can play a vital role in securing top talent and retaining them. It allows employees to know that you value their skills and drives job satisfaction.

Apart from this, you can also offer some other benefits to ensure employee retention, such as:

  1. Conducting Regular Salary Reviews and Adjustments: A consistent salary review process is an essential aspect of employee retention programs. With such a process in place, you can identify salary disparities and adjust the package of your employees. This will enable your employees to draw a competitive package and build their trust in you.
  2. Offering Comprehensive Health Insurance Plans: With comprehensive health insurance plans, you can make sure that medical expenses don’t burden your employees. At the same time, you can help them remain safe and secure.
  3. Providing Flexible Work Arrangements and Remote Work Options (If Applicable): Are you aware that 98% of employees today prefer working remotely? Flexible and remote work options enable employees to optimize their daily schedules and find a work-life balance. Such work arrangements also reduce work-related stress and enable employees to be more productive.
  4. Considering Creative Benefits Like Student Loan Repayment Assistance: Most employees today expect their employers to provide additional benefits. By providing creative benefits like student loan repayment assistance, you can help employees deal with their financial commitments. In return, such benefits can earn you the loyalty of your employees.
Also Read: Guide to Employee Engagement and Retention in Financial Services Industry

Additional Strategies for Professional Services Firms

It’s not enough to know what is the key to employee retention. You should also be able to implement that key effectively and at the right time. Here are a few additional strategies that can help to keep the turnover rate low at professional services firms:

  1. Invest in a Strong Onboarding Process: Every company must have a robust onboarding process in place. It helps you focus on an employee right from the recruitment phase and put your best foot forward. By creating a lasting impression during the onboarding phase itself, you can gain an advantage over your competitors and enhance your chances of retaining the employee.
  2. Conduct Regular Stay Interviews to Address Concerns Proactively: When you conduct stay interviews and address concerns proactively, you help create a supportive work environment for your employees. Such interviews enable you to gather employee feedback and act on them to address their concerns and needs. This approach enables you to reduce the risk of turnover threats by fostering employee engagement.
  3. Empower Employees With Decision-Making Authority: Empowered employees experience a higher degree of job satisfaction. When they exercise their power to make decisions, they begin taking ownership of their work as well. This has a positive impact on their contributions and enhances their job satisfaction, thus making it more likely for them to remain with your organization.
  4. Promote Work-Life Balance and Avoid Excessive Overtime: Maintaining a good work-life balance is essential for employees to remain healthy and productive. By promoting work-life balance, you can help them to avoid excessive overtime. Such efforts will encourage your employees to continue with your organization and contribute to a low turnover rate.
Also Read: HR Career Focus: Exploring the Role of an Employee Experience Director

Summing Up

Employee retention in professional services need not be a challenging task. You need to focus on the reasons behind employee turnover. This will help you to get clarity about how to resolve the issues. Once you do that, you can make strategic moves and introduce relevant changes in your organization.

If you are looking for help to implement the right strategies and level up your workforce, you can consider Engagedly. It’s a talent management platform that can help create a more engaged, high-performing workplace with a reduced turnover rate.

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Frequently Asked Questions

Q1. How does employee retention impact productivity?

High turnover rates can impact an organization’s workflow and result in lower productivity. On the other hand, when an organization manages to retain employees, it leads to a stable work environment. It allows employees to focus on their work and helps improve productivity.

Q2. Why is employee retention important?

When an employee quits an organization, it loses more than just talent. It also loses experience, ideas, and intellectual property. Further, the organization has to invest time, money, and effort to recruit and train another individual. By retaining employees, the organization can avoid all these hassles.

Q3. What is the most essential aspect of an employee retention strategy?

One essential aspect of a retention strategy is making your employees feel connected to your organization. Improving employee engagement and instilling a sense of belonging is an effective way to achieve this objective.


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The Top Talent Retention Challenges in Business

Talent Retention Challenges: Navigating the Workforce Puzzle

In today’s job market, keeping good employees has become quite a puzzle for businesses. It’s not just about hiring; it’s about making sure people want to stay and work with you. This is what we call talent retention challenges.

This infographic dives into the world of talent retention, showing you the main problems and how you can deal with them. From the moment someone applies for a job with you to the day they decide whether to stick around or look for another job, there are lots of things that can influence their choice.

Problems often begin when someone starts a new job. If the job isn’t what they expected, they might leave soon after starting. As they work with you, things like not having a chance to grow, not having a good work-life balance, or not getting recognized can make them think about quitting.

This infographic is here to help. We’ll talk about these problems and more, and give you practical advice and facts to help you keep your best employees happy and committed to your company. So, let’s dive into the world of Talent Retention Challenges and see how you can become a pro at keeping your top talent.


Also Read: 10 Best Employee Retention Strategies to Keep Your Best Talents
The Top Talent Retention Challenges in Businesses-pageAlso Read: Guide to Employee Engagement and Retention in Financial Services Industry

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Frequently Asked Questions

Q1. What are the challenges of talent retention?

Ans. Attracting, satisfying, and keeping the best employees can be tricky. Challenges include finding the right fit, offering growth opportunities, and creating a balanced work-life environment.

Q2. Why retaining top talent is more difficult than ever?

Ans. Retaining top talent is tougher than ever because today’s job market is highly competitive. Employees seek more than just a job; they want a fulfilling career. Finding a balance between work and life is vital, and businesses must adapt to these changing expectations to keep their best people.

Q3.Why do companies fail to retain talent?

Ans. Companies often struggle to retain talent due to various reasons. Common pitfalls include inadequate career development, lack of recognition, and not addressing work-life balance. Understanding and tackling these issues can help businesses keep their valuable employees.


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Guide to Employee Engagement and Retention in Financial Services Industry

Employee engagement is a workplace strategy to strengthen a worker’s commitment and emotional ties to the organization. It includes many initiatives regarding employees’ job roles, placement within the company, interpersonal relationships with fellow employees, and company culture. One of the most important roles of Human Resource professionals is to use employee engagement methods to boost well-being and productivity across all company levels.

Employee engagement programs aim to foster a culture wherein employees are motivated to put their best foot forward daily. The program also aims to inspire employees to contribute to the company’s overall performance by ensuring they are dedicated to its purpose, goals, and values. A highly engaged workforce is directly proportional to lower turnover, higher employee morale, and stronger business outcomes.

Employee Engagement in Finance Industry

The financial service industry forms an important part of a country’s economy and is always evolving and growing. Banks, in particular, have witnessed explosive growth and expansion over the last decade. Rising incomes have further propelled the need for financial services resulting in a great boom in advanced technology and prompt communication systems.

What fuels the finance service industry’s growth is a team of committed employees enhancing the customer experience and making the brand credible. However, the banking industry faces significant challenges in managing its talent. A survey by Gallup concludes that only 23% of employees feel engaged at work. Although the percentage has increased remarkably, not even 1 in every 4 workers is engaged, so there is definite room for improvement.

The banking sector has traditionally struggled with employee engagement. The outcome is a high staff turnover rate and absenteeism in the sector. The banking sector has been facing the highest turnover rates, at 18.6%, according to a Compdata survey.

Also read: How to Recognize the Warning Signs of Employee Disengagement

Importance of Employee Engagement in the Finance Industry

Importance of Employee Engagement in the Finance Industry

Developing and sustaining employee engagement is pivotal to every industry, especially as “the great resignation” has triggered a high competition for talent in organizations across the globe. Implementing employee engagement initiatives in the finance sector can enable employees to influence decisions, perform at their best, and drive business outcomes.

Engaging with their job, company, and colleagues makes employees feel more energized and efficient, and they go beyond what’s expected. Naturally, this nurtures their mental health at work and can positively influence colleagues and customers around them.

At the company level, employee engagement increases overall profitability. According to a Gallup analysis, highly engaged organizations observe 20% higher sales than disengaged ones.

Here are a few more benefits of an effective employee engagement program at the workplace:

  • Engaged employees are likelier to stick with their employer. They feel emotionally connected to the company and commit themselves to the development and success of the company’s bottom line.
  • Engaged employees are emotionally and professionally competent to accept new and challenging tasks.
  • Engaged workers feel responsible and do not hesitate to discuss company-wide issues with their peers and management.
  • An effective employee engagement program transforms the workplace into a vibrant and exciting workplace. 
  • Prioritizing employee engagement helps staff create and deliver enhanced customer experiences that improve the company’s competitive position and increase brand equity.
  • Engaged employees are productive brand ambassadors, allowing banks to attract more talent in today’s competitive labor market.
  • A report on employee retention trends in financial services by PWC states that 53% of finance professionals consider changing jobs within a year of joining. A strong employee engagement program can aid employee retention strategies with the financial service industry facing a great reshuffle.

Key Employee Retention Strategies for Employee engagement in finance industry

key retention strategy

With high turnover and high levels of absenteeism dominating the finance industry, an effective employee engagement strategy can strengthen the relationship between the employer and the employee. Here are the top 4 drivers of employee engagement to keep in mind for optimal results:

Leverage Employee’s Strengths

Employees want a job they find interesting and enjoy. Making the job role challenging can help interest employees. Job roles should be devised to leverage an employee’s strengths. Additionally, a well-drafted job description can help employees understand their organizational roles and responsibilities well. This, in turn, eliminates any ambiguity regarding the workflow.

How to achieve this:

  • The job description and necessary professional qualifications should be explicit throughout the application and interview.
  • Obtain regular feedback from the employee to understand their perceptions.
  • Provide opportunities for employees to put their strengths to use. Have an open communication about career advancement and progression opportunities.
  • Invest in training and development programs. One of the most important components of employee engagement is the opportunity for personal and professional development. In one study, 92% of the employees feel that access to learning and development opportunities would increase their job engagement. Data demonstrates that a more engaged staff provides superior customer service.

Run a Reward and Recognition Program

An effective staff reward and recognition program is a fantastic approach to giving constructive criticism and encouraging both small-scale and large-scale progress. A study found a significant link between appreciating employees’ efforts and happy workers. 83% of workers employed by a firm with a recognition program expressed satisfaction with their positions. A valuable tool for attracting and keeping the top personnel, a reward and recognition program promotes a respectful work atmosphere.

There is a very subtle difference between employee recognition and reward. Acknowledging your team’s efforts and accomplishments is known as employee recognition. However, rewards (monetary or non-monetary) may be utilized as a motivator to increase performance.

What components to choose when recognizing and rewarding employees:

  • Private and public recognition
  • A raise or promotion
  • A company-wide awards function
  • Monetary rewards or coupons
  • A company or team-wide email appreciating the individual
  • Extra time-offs
  • Paid vacation days for the employee’s family
  • Recognizing both team and individual efforts
Also read: 10 Ways to make your Employee Recognition Program a Success

Listen to Your Employees

Active listening

One way to make employees feel valued is to hear their concerns, opinions, and grievances. Leaders should welcome employees’ input. Active listening helps organizations cultivate a culture where employees do not fear voicing their opinions and are open to receiving and giving feedback.

How to facilitate active listening:

  • Implement an open-door policy and take continuous feedback from employees.
  • Surveys and feedback systems are great tools for facilitating active listening. These forms can communicate collective concerns, issues, and feedback accurately and anonymously. It allows employers to be more informed about their team’s sentiments.
  • Avoid taking feedback personally.
  • Draft a plan or strategy to act on the feedback received.
  • Follow up and inform your employees about your plan of action.
  • Encourage employee feedback and communicate your appreciation.

Ensure Transparent Communication

A study reveals that organizations that readily share information with employees and encourage them to participate in company processes manage to develop a favorable reputation among employees and beyond. Transparent communication is one of the prime factors contributing to employee happiness.

Transparent communication also helps employees better cope with change. A study found that building trust based on transparent communication allows employees to better accept and cope with organizational changes. For instance, a change in the company’s management due to mergers and acquisitions might substantially affect an employee’s daily work life. Providing employees with real-time updates can help them prepare for changes to occur in the future.

How to promote transparent communication in the workplace:

  • Maintain a balance between expressing empathy and respecting privacy.
  • Use different channels of communication depending on their effectiveness and applicability.
  • Be clear about your values.
  • Avoid jargon; use words everyone can understand.
  • Share real-time updates.
  • Explain why certain information cannot be shared.
Also read: Why Does Workplace Communication Matter?

While the financial service sector has been navigating high turnover rates, prioritizing and improving employee engagement can help. Implement an employee retention strategy guide that supports employees and creates a top-performing workforce. 

Wrapping Up

When done with good intent, employee engagement can cultivate a positive work culture, resulting in more devoted employees and growth for the organization. Since absenteeism and turnover are major concerns in the industry, an effective employee engagement strategy is what the finance industry needs right now.

A robust employee engagement platform can help streamline your initiatives to build trust, facilitate communication, and introduce recognition programs. Engagedly is a multi-faceted platform that aims at improving the employee experience. Our cloud-based performance management software focuses on increasing employee engagement and helps HR professionals manage employee productivity and progress efficiently. Visit our website today!

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Frequently Asked Questions

Q1. How can a business identify actively engaged employees?

Ans. Actively engaged employees are invested in their job roles and the company. They take initiative, possess good leadership and interpersonal skills, and have a positive outlook on the company’s future and strong work ethics.

Q2. What are some of the HR metrics to measure employee engagement?

Ans. The following HR metrics can be used to measure employee engagement:

Q3. What is the relation between employee engagement and KPIs?

Ans. KPIs or key performance indicators help increase employee engagement by providing accurate and insightful data to measure employee engagement levels. Additionally, it helps identify the causes of high turnover and absenteeism rates.

 


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10 Best Employee Retention Strategies to Keep Your Best Talents

How do you retain top talent in your company? Organizations are constantly searching for employee retention strategies to keep their employees in today’s competitive environment.

Employee retention is a challenge for every organization. The cost of replacing employees is high, and the benefits of retaining them are even higher. If you want to keep your best workers, you must take steps to ensure they stay happy and productive.

 An effective employee retention strategy is a critical competitive differentiator. It allows a business to retain its employees, which helps it operate at a higher level. Those who achieve high employee retention rates operate from a position of strength, both in meeting business goals and recruiting new employees.

Here are the Employee Retention Strategies that can Help You:

1. Provide an attractive compensation package

You must ensure a competitive and fair salary throughout the organization. Your job offer should include salary, bonus, stock options, health insurance, vacation time, etc. It would help if you made sure that these things align with what other people at your company earn. 

Factors such as development opportunities, compensation benefits, rewards and recognition, and work culture play a vital role in holding back your employees. If you provide an attractive compensation package, it will entice your best employees to stick around. They know they have plenty to gain by staying with your company. 

Also read: Continuous Feedback: What Is It And Its Benefits

2. Offer flexible work arrangements

When someone leaves a company, there is often a gap between off-boarding and joining the next job. It creates a no income period, though the person still has to spend on gas and food while looking for alternative employment.

To avoid this problem, you should have flexible work hours or working from home. These arrangements allow your employees to continue earning money during this transition period.

3. Recognize that retention starts with recruiting

Retention begins at the very beginning, from when you prepare the job description to when you choose who to interview. It starts by identifying which aspects of culture and strategy are important to you, then finding those qualities in your candidates.

The longer someone is with your company, the better they get at their job. You need to make sure everyone is fully engaged and partakes in the company‘s ongoing success,” says Dan Pickett, Former CEO, Nfrastructure. He followed this approach in his company and was successful in retaining above 97% of their employees, which is an impressive feat to achieve in the IT industry.  

4. Encourage communication.

If you wish to retain your top performers, you need to ‌enhance your communications process. The internal communication about employee growth and development between the employees and management is pivotal for any organization. It not only attracts the top talents but also provides higher job satisfaction to its existing employees.

Effective Communication not only creates a positive work environment by building trust and relationships but also induces the employees to perform better by minimizing the errors. As the employees are well-aware of changes being made within the company, they are more adaptive to these changes because of effective communication.

5. Identify the candidates who will stay long term

How can you select candidates who are most likely to stay? You can tell if they’re qualified by looking at their resume. First, look for employees who have been at their current job for a long time.

Try to look beyond their resume to understand if they will stay. Has the employee ever worked with companies for a longer term? If yes! It shows that the employee has an intention to work long-term and has a high loyalty score. Anyone who has changed 3-4 jobs in 5 years is less likely to stay with any company.  

It would help if you also looked for someone whose hobbies include playing team sports, volunteering, etc. These activities can indicate that they’re invested in a cause, team, or sport and that they’ve got the mindset to stick with things they care about.

6. Recognize their contribution

Employees who feel much appreciated are more likely to stay. According to the Society for Human Resource Management Survey, 68% of HR admitted that appreciation and recognition play a vital role in improving the retention rate for any organization. Yet, many organizations can implement successful retention programs. 

Companies should devise proven recognition programs and encourage the direct managers to recognize their  subordinates’ efforts.. This makes the employees feel valued at different levels. 

7. Help employees to maintain work-life balance

Erratic work schedules and hectic life are common among the people working with private organizations. The flexible schedule and remote work help the employees achieve work-life balance. But, if the employees are overworked and assigned targets that are not achievable, it impacts them adversely. 

The managers must check that only that much work should be assigned that the employees can handle efficiently for the specific time slot. Tasks such as unnecessary meetings and other administrative duties which are counter productive should be cut down drastically. 

8. Improve organizational culture

Do you know that organizational culture is one of the key factors in retaining employees? Strong corporate culture plays a vital role in attracting new talents and keeping existing ones. 

If you want to keep your best talent, you must create a positive work environment where employees feel comfortable sharing ideas, suggestions, and feedback. This way, you’ll get better results from your employees. To achieve a strong corporate culture, the organization should:

  • Have firm commitments to diversity and equity
  • Understanding and supportive leadership.
  • Value the employee’s voice
  • Carry out the clearly articulated values 

9. Flexibility to employees

No one wants to work in an organization with rigid policies. Employees look for flexibility to accommodate their emergencies and other responsibilities in life, such as medical needs, family time, and other miscellaneous tasks. Organizations that give flexible work schedules or the options like compressed workweek deliver higher job satisfaction for employees. 

It is considered an important employee retention strategy that encourages the employees to stay longer with their existing organization.

10. Creating Growth Pathways.

The lack of opportunities often gives employees ample reason to change their current job. Every employee looks for upward mobility in their existing companies. Due to the lack of such opportunities, employees are likely to look outside the organization. With dedicated career pathing, an organization increases employee engagement and assures them that their future is secure, with ample growth opportunities in their existing organization. 

Also read: 4 Creative Team Building Activities

Frequently Asked Questions (FAQs) 

1. What is the difference between “Employee Engagement” and “Employee Retention”?

Engagement refers to the level of interest and involvement that an individual has in their job. It means how an employee feels connected to their employer and colleagues. On the contrary, retention refers to the length of service of an employee within an organization. It indicates how long an employee stays with the company after getting hired. Employee Engagement attributes to Employee Retention. 

2. Why do we need to focus on Employee Retention?

Employee retention is essential for any business because if they lose their valuable employees, they will have to spend more money on hiring and training new employees. Also, when there is no employee retention strategy implemented by the organization, they might face problems in achieving their goals.

3. What are some of the most common reasons for Employee Attrition?

  • Pay issues – When employees don’t receive fair compensation for what they do, it can be very difficult to stick around. In a survey of 900 employees, over 35% of the employees admitted they would quit their jobs if they don’t get a raise in their salary.
  • Workload – Too much work without enough resources can lead to burnout and eventually quitting.
  • Lack of recognition – No matter how hard you try, sometimes you won’t succeed at everything you set out to accomplish. Organizations that do not recognize their employees have a higher turnover, up to 31%

Conclusion 

Many factors determine whether someone leaves their job or not. For any organization, employees are the assets. Hence, no organization can afford to lose the best of its talents. But if your organization doesn’t implement any employee retention strategy, you’ll probably lose your best talents.

 


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