In the dynamic landscape of Australian workplaces, an alarming number of employees are considering leaving their jobs within the next year. This trend is fuelled by a mix of factors, including sluggish wage growth, the cost-of-living crisis, and heightened levels of stress and burnout. For small businesses, understanding the reasons behind this potential exodus is crucial, as they gear up for the New Year – a time traditionally marked by resignations.
Why people quit
One major contributor to job dissatisfaction is underperforming leadership. Shockingly, nearly half of first-time managers underperform, negatively impacting employee morale and job satisfaction. In addition to poor leadership, factors such as compensation, growth opportunities, work-life balance, and alignment with business values play pivotal roles in an employee’s decision to stay or leave.
What makes people stay
High employee retention is not a one-size-fits-all achievement. However, workplaces with successful retention share common qualities. Employees feel valued, adequately compensated, report to effective leaders, enjoy autonomy, and have clarity on growth opportunities. They also experience a sense of psychological safety, benefit from hybrid work flexibility, and find purpose in their roles.
Actions for business owners
Implement regular career conversations
Employers should priorities regular career development conversations. Managers need to engage in ongoing discussions with employees, focusing on goals, expectations, and individual growth opportunities. These conversations empower employees to take ownership of their development and foster a sense of value within the business. A common myth is that the performance review is dead, a waste of time, a tick box exercise, but having career conversations is still critical to retaining employees.
Champion psychological safety
Creating a psychologically safe workplace is essential for employee well-being. Employers can achieve this by leading with empathy, fostering open communication, promoting diversity, equity, and inclusion, and celebrating both successes and mistakes. A psychologically safe environment encourages employees to be themselves and seek help when needed.
Prioritise personalised learning and development
Traditional learning and development methods often face engagement challenges. Small businesses can overcome this by offering personalised development opportunities. This includes setting specific goals, allocating time and resources for skill development, and ensuring practical application of new skills on the job.
Maintain open communication through regular catch-ups
Small business leaders must prioritise regular one-on-one catch-ups with employees. These meetings serve as valuable opportunities to engage in open conversations about job satisfaction, overall happiness, and factors that contribute to their decision to stay with the business. By consistently checking in and asking open-ended questions, leaders demonstrate a genuine interest in their employees’ well-being and create a space for honest dialogue.
Why this matters
Employee engagement – Regular catch-ups foster a sense of connection and engagement. Employees feel heard, valued, and part of the decision-making process.
Identifying concerns – Open conversations help identify any potential concerns or challenges early on, allowing leaders to address issues proactively and prevent dissatisfaction from escalating.
Building trust – Consistent communication builds trust between leaders and employees. When employees see that their opinions matter, they are more likely to feel a sense of loyalty to the organisation.
Understanding motivations – By asking open questions about what makes employees happy and motivated, leaders gain insights into individual preferences and can tailor strategies to enhance job satisfaction.
Maintaining regular catch-ups and fostering open communication is a fundamental aspect of employee retention. Business leaders who prioritise these interactions contribute to a positive workplace culture where employees feel valued, heard, and motivated to stay for the long term.
Business owners should take proactive steps to prevent a potential wave of resignations in January. By fostering a workplace culture that values employees, priorities professional development, and ensures psychological safety, small businesses can position themselves for success in retaining their valuable talent.
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