Half your staff are planning to quit soon, reveals Personio’s study: Here’s how you can make them stay

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Bayern, Germany-based Personio, a developer of HR management and recruiting platform for SMEs and startups, has published a report titled “The Great Re-evaluation.” 

The report discusses employees’ changing priorities for the workplace, how employers must, in turn, re-evaluate how they manage talent at the time of the “Great Re-evaluation,” – and what the HR function needs to make this happen.

Simply put, the Great Re-Evaluation is a period of introspection and reflection that many people are going through. It’s a time to reassess values, priorities, and goals.

For many, it was set off by the COVID-19 pandemic. With the world being put on pause, the break from the routine of the 9-to-5, five days a week, people were forced to rethink their values in work and life.

“Today, 62 per cent of employers across Europe are struggling to recruit the skilled talent they need, while employees are far more open to changing roles,” says Personio’s latest report. 

Here are a few key points from the Personio’s report.

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Image credits: Personio

46% of employees are ready to jump

According to the report, nearly half (46 per cent) of employees at European SMEs are considering a job move in the next 12 months. Even if they don’t make the jump, it still means that many staff are not motivated at work, adds the report. 

The report reveals that those who have worked remotely over the past 12 months are more likely to look for a new job in the next 12 months than those who worked hybrid or in an external workplace.

There is a risk that remote working could lead to higher levels of job dissatisfaction or that a sudden return to the office could be difficult after people have enjoyed more freedom.

What do HR professionals have to say?

The research shows that many HR professionals in small and medium-sized businesses are aware of the scale of the problem. 

Almost two-fifths of HR decision makers (38 per cent) expect to see more staff than usual leaving their business in the next 6-12 months, rising to over half (54 per cent) in the Netherlands. In Spain, just a quarter (25 per cent) of employers are concerned about staff leaving. 

The survey reveals that half (48 per cent) of HR decision-makers feel their leadership team doesn’t realise the scale of their current skills shortages, which could prevent 53 per cent of leadership teams from effectively tackling them.

“90% of HRDMs at European SMEs report that their business suffers from skills shortages, retention or hiring issues. And while recruitment is undeniably important, businesses need to understand better what drives retention – after all, fewer employees leaving means fewer that need recruiting and greater engagement levels. In addition, once lost productivity, recruitment, and onboarding costs are accounted for, it can cost as much as 33% of someone’s annual salary to replace them – meaning employee turnover can take a huge toll on a business’s bottom line. Employers’ priority shouldn’t just be to stop people from leaving. It needs to be about retaining and maintaining a motivated, productive and engaged workforce,” says Pete Cooper, Director of People Partnering at Personio.

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Image credits: Personio

The Great Re-evaluation

According to the report published by Personio, spending more time with family and having a better work-life balance have become more important for employees – even more than salary.

Also, over half (57 per cent) of employees place greater importance on working for an employer with a bigger purpose beyond making money, which has become much more important among younger generations.

Dissatisfied with their career progression

Nearly a third (31 per cent) of employees feel they have missed out on a promotion they felt was due within the past year, while almost one in four (37 per cent) employees feel the pandemic has held back their careers. 

Moreover, 27 per cent of employees feel that working remotely has held them back in terms of career progression.

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Image credits: Personio

Retention strategies

The top reasons for leaving given by employees across European SMEs are:

  • Stressful working environments.
  • Lack of appreciation for the work they do.
  • Lack of career progression opportunities.

These are critical areas for HR, and their colleagues in leadership, to look at to help keep people in the business, adds the report. 

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Image credits: Personio

Actions to retain talents

As a result, 96 per cent of HR decision-makers say they are taking some action to help retain their current workforce. It includes:

  • Improving benefits and salaries 
  • Providing more recognition 
  • Appreciation of work 

Employees care about a lot more than just compensation. So while employers should ensure their compensation packages are competitive, that’s no longer enough. “Here, great quality performance and career discussions are crucial. They not only highlight personal pull and push factors, but also help leaders identify overworked or frustrated employees and ensure they get the appreciation and career progression opportunities they need,” says Ross Seychell, Chief People Officer at Personio.

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Image credits: Personio

Performance reviews

Performance reviews are a critical component in retaining talent. But the data shows that employees say performance reviews are neither fair nor frequent. 

The research also highlights that only 39 per cent of employees have received regular feedback on their performance since the pandemic.

Reviewing performance review

The report says, “HR decision-makers at European SMEs think employees get more feedback than they do, which indicates there could be a broken link in the management chain.”

While two-thirds (66 per cent) of HR decision-makers say formal reviews occur more than once a year, just two-fifths of employees (43 per cent) say they receive multiple formal reviews each year. 

However, a fifth (18 per cent) of employees say their performance is never formally reviewed by their manager – going up to 25 per cent among employees in Germany. 

16 per cent of European employees say they never get informal feedback.

Further, the report reveals that 56 per cent of HRDMs agree performance review processes are biased against employees working remotely compared to those who come to the office.

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Image credits: Personio

HR team challenges

The research also reveals that budget constraints and too much admin are the biggest factors holding back HR functions from supporting the business’s success. 

Around 59 per cent of HR reports that they don’t have enough time to manage people’s development as effectively as they would like.

55 per cent of HRDM reveals that they are spending time on admin tasks, preventing them from investing time on more strategic work.

One in six (18 per cent) mention a lack of HR resources to put towards strategic work as a key factor, with the same number citing low organisation morale or engagement and lack of collaboration with the senior leadership team as holding them back.

“HR teams are right at the centre of this opportunity. They must revisit and reassess recruitment and retention strategies to make sure these are fit for purpose in the post-pandemic talent market. This includes looking again at their existing performance review framework and making sure that it recognises where their people have the most impact on their business while connecting those who are working now hybrid or even fully remote,” says Ross Seychell.

“But they can only do this if they are a strategic partner in the business and have access to the proper resources and budget needed to tackle these issues. Unless HR teams can be freed up from admin and access a strong bedrock of data that can fuel their strategic decisions, businesses will risk their success. At this pivotal moment, the future of European SMEs is in the hands of their HR teams,” he adds.

Want to know how HRs across Europe are rethinking retention and performance management post pandemic? Get this FREE study by PERSONIO now!

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