If you belong to the HR fraternity, you may have come across other HR professionals talking on social media about how high employee turnover is a big red flag. It’s a clear indication that the employer is doing something so wrong that even the best talent wants to exit their companies. This brings us to a concept that’s gained hype on social media in the past decade or so (and with good reason) - employee retention.

What is employee retention?

The concept may sound fancy, but it’s actually pretty simple to understand. Think of employee retention as the opposite of employee turnover - it’s your effort to keep talent within the company.

In case you’re wondering, employee retention is measured by a metric called employee retention rate. Without trying to sound too booking, it’s the percentage of people who leave the organisation in a given timeframe i.e. a quarter, half-year or year.

Why is employee retention important for businesses in Pakistan?

If you’ve been in the HR field for a while, your line manager may have told you that employee retention rate is one of your KPIs. That’s how important it is for employers in Pakistan (or anywhere in the world for that matter) to retain talent.

There’s compelling evidence to prove that employee retention is, in fact, a key metric that employers need to track periodically.

According to recent research conducted by Gallup, companies with high employee engagement can enjoy a 21% increase in profitability. In other words, getting employees to be committed to staying with a company and achieving its goals makes the company almost one-fourth more profitable. That’s unarguably a significant number and reason enough for you to implement strategies to achieve a healthy employee retention rate.

If that’s not convincing enough for you, here’s another interesting fact uncovered through the same study - companies with highly engaged employees can achieve a whopping 20% boost in sales. Alarming, isn’t it?

Why employees leave companies in Pakistan [3 top reasons]

In Pakistan, there are a number of reasons why people leave companies, some of which are specific to the Pakistani employment landscape.

We’ve done some digging for you to tell you the three biggest reasons why people in Pakistan leave their jobs.

1. The ‘sethiya’ culture

Employee turnover runs high in companies with a traditional ‘sethiya’ culture where one ‘seth sahib’ or ‘boss’ calls the shots, and everyone else must comply. That’s most companies in Pakistan where old school, autrocratic managers run the show, and reportees have no say in decision-making among other things.

2. Low pay scales

There have been multiple spikes in inflation rate in Pakistan over the past one year, but pay scales remain low. Most employers haven’t given their employees inflationary adjustments either. It’s no surprise then that the trend of employees switching to jobs that pay in foreign currency is emerging, and it’s most likely going to grow in the coming years if prices continue to rise. This is bad news for local employers. Take it as a clear sign that you need to work extra hard to ensure that you don’t lose talent, and now is the time to strike.

3. Better compensation

Pakistan is no longer an affordable country to live in. The cost of living for the average earner has gone up to unaffordable levels. On top of that, families in Pakistan tend to be quite large with an average of five dependants to feed (including the spouse and parents). It’s no wonder that practically anyone who receives a job offer with as little as a 20% salary bump won’t think twice about accepting it.

How you should go about retaining your employees is what we’re going to delve into next.

Strategies to increase employee retention

We’ve been around the block for quite a while, so trust us to know what works and doesn’t work when it comes to retaining employees. Besides, you’re reading this article because you’re most probably looking for ways to get your colleagues to stick with your company.

That said, here are four tried-and-tested strategies for you to increase employee retention.

1. Build a people-friendly culture

Lousy managers are the number one reason why people leave companies. Because people make a company’s culture, when you have an office full of lousy managers, you have a culture that drives good talent away. If this is the case with your company, there’s no arguing that it needs a cultural makeover.

Cultural change is one of the toughest things for HR professionals to achieve, but it’s also one that can transform a company from a loss-making unit to a revenue engine. Educating line managers on people-friendly norms such as having weekly check-ins, recognising efforts and implementing reportees’ ideas, to name a few, and leading by example is the best way forward. Keep in mind, though, that cultural change takes time, so be patient and persistent.

2. Give the right recognition and rewards

The days of just doling out annual increments and bonuses are long gone. With the rise of remote work, more and more local talent is switching to companies with HR policies that favour employees. They pay generous salaries, give bonuses and increments multiple times a year, offer Earned Wage Access (EWA) and openly appreciate people for their hard work. This is just the tip of the iceberg, but it’s a reasonable starting point.

You may want to connect with HR professionals at people-friendly companies to learn about what they’re doing to recognise and reward their employees.

Job offers from employee-oriented companies are hard to refuse, so you might want to consider being at par with them if you want great talent to stay with your company.

3. Deliver a brilliant onboarding experience

Did you know that, according to research, 69% of employees will stay for at least three years with a company that creates an exceptional onboarding experience for them? What this means for you is this: make employees feel important from sourcing all the way to induction. Also make sure that their line managers are part of the onboarding process.

Don’t just have line managers interview talent that applies for positions that report to them. Go one step further and set up a time for the line managers to chat with their new reportees on their first days in their new roles. Introduce the new team members to the whole company in an all-hands meeting or a newsletter.

Equally important is you having a one-to-one with new hires to brief them on company policies, norms and anything else they need to know before they get to work.

What will result is talent that not only raves about your company to others but also becomes loyal enough to stay with your company for a few years.

4. Provide professional development opportunities

If you ask people what they look for in an employer, they’re most likely going mention career growth. This is especially true for people who feel stagnant in their existing jobs.

Make a comprehensive professional development plan, and follow through with it. Circulate a monthly, quarterly or annual training calendar company-wide. To ensure a good turnout, tie attending training sessions and/or completing courses to performance so that those who participate are rewarded.

Nominate in-house facilitators or invite guest speakers from outside the company to conduct learning and development sessions on topics based on employees’ learning needs. Keep in mind that, for this to work, you’ll need to have conducted a Learning Needs Analysis (LNA) to identify the skills that employees need to develop.

What’s next?

Sit down and identify which employee retention strategies you’ve already implemented, which ones have worked and which haven’t. Double down on those that have worked, and replace the rest with new strategies.

While you’re at it, don’t forget to stick with your own job!