5 Reasons Why Employee Retention Is a Challenge and How to Increase It

With how demanding the market can be, businesses find themselves pushing employees to burnout.

April 19, 2022
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Employees are essential figures in the company. Without employees, there would barely even be a company. But with how demanding the market can be, businesses find themselves pushing employees to burnout. This, in turn, pushes employees to resign and find work elsewhere, hoping for better work benefits, pay, and overall work-life balance in their new job.

While it could be relatively easy to find new employees to fill specific positions, there is no denying that resigning employees harm the company and add significant costs (check out this blog post to learn more) . As a result, companies lose people with skills and experience that only comes with time working, someone the company has invested resources in, and vice versa.

There are many reasons employees choose to resign, which may have nothing to do with the company itself. However, there is no denying that the current universal work culture that emphasizes long hours and fast-paced deadlines has helped nudge employees to choose. 

What is Employee Retention?

Employee retention is the organization's ability to keep their employees from voluntarily resigning their positions, and employee turnover is the loss of organizational talent over some time. In a perfect scenario, employers can reduce overall turnover while keeping high-performing employees on board for a long time. 

Companies are conscious of their employee retention rates because they need to keep their best employees around for the organization to thrive. It is also estimated that U.S. businesses spend more than $1 trillion a year to replace employees who voluntarily resign. A high turnover rate for the company also means a direct strike to revenue, productivity, employee experience, and knowledge retention.

While Human Resources departments strive to keep a healthy and successful organization by implementing strategies that mitigate employee turnover risks, the company's demands may create unhealthy and unbalanced work conditions that leave employees jaded to handing in their two weeks' notice. 

Why is Employee Retention a Challenge?

In 2020, a phenomenon called "The Great Resignation" took many companies by surprise, a spike in employee turnover, which was prompted by an overwhelming snowball effect of years of job burnout and disengagement. The pandemic's sudden shift to remote work produced unique challenges that led to many employees voluntarily leaving their positions. While "The height of the pandemic could have prompted the Great Resignation," it has actually been a long time coming.  

1. Employee Burnout 

Employees experience burnout when work overload, low morale, high-pressure deadlines, lack of schedule flexibility, blurred work-life balance, and other unclear and unrealistic expectations are too heavy for the employee. For example, in a Gallup study conducted in 2018, two-thirds of full-time employees reported experiencing burnout in their jobs

When employees feel like they are consumed by work and can't or cannot take a break from their work, they start feeling a sense of dissatisfaction, if not resentment, in their work, which prompts them to search for other job opportunities that can offer them a reprieve. 

It can be useful to run internal Pulse Check surveys to better understand how employees are feeling.

2. Work Disengagement 

When there are unclear goals, lack of employee development, and poor leadership, employees feel less engaged in their work. This disengagement directly affects workplace productivity. For example, another Gallup study conducted in 2017, a survey by Gallup found that 85% of employees experienced being disengaged at work.

While the disengaged employees may not present themselves as the worst performers, their indifference to the organization makes them give the company their time, but not their best effort or best ideas to help propel the company forward. Instead, they feel a disconnect between themselves, their job, and their impact on the company.

Make sure you create clear paths for two-way communication through 1:1s, manager feedback and Ask Me Anything Flows.

3. Organizational Culture

Tied to reasons number 1 and 2, an employee's daily interactions with their colleagues and work environment can directly link to their willingness to be retained in the company. 

If the organizational culture lauds overworking and little to no work-life balance, the employee feels the need to match that to fit in with their team. However, that will just negatively affect the employee. For example, suppose the company does not see the importance of business communication and simply directs orders like a drill sergeant. In that case, employees may not have that drive or passion for their position and would want to seek that elsewhere.

One of the proven ways to improve internal culture is through peer-to-peer recognition. Assembly provides best in class recognition tools that make it fun and easy for employees to engage.

4. Salary Dissatisfaction 

Employees may feel a sense of financial insecurity and look to build a sound financial future for themselves and their dependents. They may bring this up with the HR, who then informs the Finance department only to find out that a salary raise is available to some extent, but the salary budget cannot allow for anything more. Should the employee feel overworked and underpaid, they will consider searching for another organization that can meet their financial needs. 

5. Career Advancement Opportunities 

Promotions are often one of the greatest motivators for employees who want to build a career in their field. However, if the company they are currently working for does not offer clear career advancement plans and it seems like they are not growing as an employee, they may feel stagnant in their position and opt to find another organization that can help them propel their career. 

While the company cannot completely diminish its employee turnover rate, it can certainly improve its internal operations to provide a healthy working environment for its employees. After all, happy employees positively impact the company's performance. 

Make a habit of running Career Development Surveys so that there is clarity on where the employees see their future.

Encourage collaboration and teamwork in your organization with a recognition program that is effective and enjoyable. Book a demo with Assembly and give your company culture a boost.  

Browse our Free Employee Recognition Guide

Get the foundational knowledge on creating an employee recognition program that boosts employee engagement and helps them feel valued.

Explore Guide
Employee recognition guide

Frequently Asked Questions

Is Assembly SOC 2 compliant?

Yes, at Assembly, security is a top priority. Each quarter, we have ongoing security work that is everyone’s responsibility. While we maintain a strong security posture, it was important for us to prove to our customers that we do everything we claim to do. This led us to pursue a SOC 2 Type II report that would provide evidence of our compliance with industry gold-standard security practice.

What's the ROI for employee recognition?

There is study after study showing that employee recognition leads to increased engagement. This in return creates an environment where employees are happier and more motivated which increase productivity and reduces voluntary turnover significantly. In order to filled critical roles, companies tend to spend nearly twice the value of an annual salary. Assembly is an investment in your employees that supports your bottom line.

Does Assembly offer longer-term contracts?

Yes, we will offer contracts for companies with longer-term agreements to help larger customers have more certainty around future costs.

The minimum agreement term is a 12-month subscription.

Does Assembly offer onboarding support?

We do and for FREE! Any new customer needing further support to get started with Assembly to ensure you're set up for success can request custom onboarding support. Improving your employee experience is about much more than just using our amazing software; it’s about transforming your business to create a workplace that people love. That’s much easier to do with the personal support and advice from our passionate people experts.

Is there a free version of Assembly?

Yes. We offer a completely free plan for up to 50 team members. This plan is intended for teams or organizations that are looking to get started with an employee engagement tool. Keep in mind, this plan is limited in features.

All customers can open an Assembly account for free and get started without a credit card. Then you can change plans as necessary.

How much do rewards cost?

At the time of redemption (when your employees exchange their points for a paid reward) you'll pay face value. If a reward is a $10 Amazon gift card, your cost will be $10. All paid rewards are billed for on a monthly basis.

The good news is that you don't have to pay for rewards upfront because we only charge you when points are redeemed, not when they're earned.

Does Assembly offer discounts?

We offer discounts or educational or charitable organizations. In order to secure a discount, you'll first need to book a demo with a customer support specialist.

For all other organizations, we are willing to consider longer-term agreements in exchange for discounts. To set up annual plans or longer, you will need to book a demo with a customer support specialist.

How do I cancel my plan if needed?

If you're on a month to month plan, you can go here and cancel anytime. If you're having concerns or need help setting up your account for success, you can always book a demo with a customer support specialist.

If you're on a longer-term custom plan, you'll need to reach out to your customer support specialist to cancel your account or email us at support@joinassembly.com.

What customizations are available?

Great question! You can customize your core values to match your organization's to boost and track alignment. You can change your currency from the 🏆 emoji (our default) to any emoji of your choice. You can swap our logo for your own. You can also set up company culture rewards such as, "Lunch with the CEO," "Buy a book on us," and so much more!

Who can give or receive recognition?

While we recommend a peer to peer set up where anyone in your organization can give or receive recognition, you can set up Assembly however you want. If you need to limit the people who can give or receive recognition, that's perfectly fine and can be done from your Admin, here.

What integrations are available?

Assembly connects to the tools your employees use every day to offer an easy, seamless experience with minimal change management.  

Assembly has integrations with HCM/HRIS systems like ADP, Google, Office 365, and Slack. We also integrate with communication tools like Slack and Teams so you and your employees can access Assembly wherever they work now.

What's your average adoption rate?

That depends on the company's permissions set up. That said, over 90% of the employees on Assembly's platform are recognized on a monthly basis. That means nearly every employee across all of our customers are receiving regular recognition from their peers, managers, or leadership. We're extremely proud of this.

Must rewards be set up to use Assembly?

They are not required. You can use Assembly without having rewards set up. However, we don't recommend it if you intend to have a high adoption and usage rate. You can always keep the costs down by offering internal culture rewards that are fulfilled by you internally.

Are points required to use Assembly?

No, you can remove allowances from anyone or everyone. It's up to you but we do recommend using points whether they're worth a real dollar value or not. Companies that use points have a much higher engagement rate even if those points don't exchange for real dollars.

Could find the answer you are looking for?

Please schedule time with an expert and we will help you to get all your questions answered