What it Takes to Retain Employees in 2021
Employee volatility across the Fortune 100 is up 8% on average over last year. This means most companies in the Fortune 100 are facing above-average risk of losing key talent.
Even with the labor market generally improving with the rollout of vaccinations, employee volatility and sentiment will be a top concern for employers in 2021. KPMG found as a result of COVID-19, CEOs across the world foresee talent risk as one of the most significant challenges for their organizations moving forward.
Retaining key talent is just as important as finding new, high-quality candidates when it comes to building back and growing the workforce.
Leading the Charge Despite Uncertainty
Despite the labor market challenges of the past year, several Fortune 100 companies came out of 2020 with exceptionally strong employee retention rates. Workforce Logiq’s annual Working Best Awards, which are based on proven and proprietary data science, recently unveiled eight Fortune 100 companies that had the lowest levels of employee volatility – or in other words, the highest retention rate – over the course of 2020.
According to the data, employees at the winning companies are six times less likely to look for external job opportunities than those at other Fortune 100 companies. And when it comes to what’s making employees stay, the top retention drivers are strong leadership and business stability. This demonstrates these employees’ confidence in leaderships’ ability to navigate last year’s disruptive events, what could come and the value they place on safe, healthy and stable work environments.
Leading the charge in first place was Cardinal Health with a volatility rate 162% lower than the Fortune 100 average of 50.89. Northrop Grumman Corporation secured second place with a volatility rate 125% lower than the average, followed by Merck, Pfizer and Verizon which rounded out the top five. Also making the list are Lockheed Martin Corporation, The Proctor & Gamble Company and Best Buy Co., Inc.
Let’s Talk About the Data
The 2021 Retention Leaders were identified based on their Talent Retention Risk (TRR) ScoreSM, a proprietary, predictive measure of how likely employees are to be open to receiving unsolicited recruiting messages and external job opportunities over the next 60 to 90 days. The lower the score, the higher the retention rate. Only companies that have an average annual TRR score of below 45 and no single-month score above 50 qualify as an Employee Retention Leader.
This year, just eight of the Fortune 100 made the cut – an especially noteworthy achievement considering 2020 was such a tough and uncertain year for the labor market.
The scores are calculated by using AI to predict how various factors, including industry, company, and candidate-specific benchmarks contribute to employee stability and volatility. The AI algorithms consider macroeconomic trends, company-level social media and news sentiment, announcements of leadership changes or layoffs, job posting trends, industry news and events, and more, to evaluate retention risk.
While every company’s talent retention journey looks different based on their unique organizational factors, employers of all sizes and industries can become retention leaders and foster attractive work environments.
Looking Ahead: Where Tech Can Help
There are several ways organizations can leverage AI to achieve retention goals. In addition to predicting internal talent volatility and the work attributes most important to employees, which enables employers to proactively target at-risk talent with retention-based messaging and campaigns, the technology can project skills gaps. This gives employers an opportunity to get out ahead of capability and subsequent retention issues by upskilling existing talent and talent pooling new candidates to meet those future needs.
Offering remote work arrangements even after the pandemic lifts will be a key part of most organizations’ retention strategies. As worker expectations shift toward more flexible options, employers can use AI to identify which roles are best suited for on-site arrangements versus remote or near-remote arrangements, where employees are within commuting distance from an office.
The technology looks at job descriptions, salary profiles, local commuting patterns, employer-specific metrics, the level of collaboration required of the role and more, to predict the best arrangement for the role. This equips employers to make the staffing decision that is both best for the business and positions the employee for the most success. The flexibility of a hybrid remote work model meets employee needs and wants today and allows organizations to quickly pivot back to a fully remote workforce if there’s ever a need.
Gender, ethnic, neuro and other diversity are also directly linked to talent retention. When employees feel respected, heard and included, they’re more apt to want to stay with the organization long term. For example, our AI-powered algorithms show that women are 40% less likely to be a retention risk if their job category has higher female representation in the workplace. Workers also tend to perform better in a diverse workplace, given they are regularly exposed to different ideas and ways of thinking, and can pick up new skills and knowledge from colleagues with different backgrounds, which can eventually create new career opportunities.
AI can help employers move the needle on diversity initiatives and foster an inclusive and equitable environment. By predicting which prospective hires are likely to have diverse backgrounds – gender, national origin, ethnicity, veteran status and more – employers can include these candidates with the right skillsets earlier on in the recruiting funnel. This boosts employee representation and creates a more inclusive workplace where employees want to work and can thrive.
Retention and Recruiting Go Hand-in-Hand
Employee retention has always been a top challenge, but in today’s hyper-uncertain landscape, retaining high-quality talent is essential for stability and growth. The key to being successful: leveraging AI and technology that enables companies to make smart, data-driven workforce decisions, equipping them to win and retain the talent they need to be agile and perform.