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Beware The Turnover Spike

Posted by Insightlink on 07/17/14

There is never a dull moment in the employment cycle. A current example shows that in the U.S., unemployment rates are declining while turnover rates are escalating. Some researchers are actually predicting turnover rates are going to ‘spike’ in the U.S. this year, as more people are back to work and feeling more confident about their futures and job prospects. Consulting firm Accelir surveyed human resource professionals and corporate leaders in the summer of 2013 and published a paper titled “Rewards and Recognition: 2014 Trends Report”.

The report cites government statistics showing that job tenure in the United States is less than five years. Other research has shown that most Millennial workers expect to stay at a job no more than three years. Turnover is expensive and while sometimes it cannot be avoided, you should be doing the right things for your employees to minimize its impact.

Three trends in reward and recognition programs include:

Early Service Rewards
Since job tenure is less than 5 years, employers are moving toward early recognition instead of waiting for the traditional 5, 10 and 20 year service awards. The survey found more than 91% of companies participate in service awards and 70% of employees felt they should start being recognized after one year of service.

Recognition Culture
This movement may be one of the most difficult to develop, while being the biggest area for growth. Our own research shows that only one-third of employees are satisfied with the level of reward and recognition in their organizations. In order for a culture of recognition to be successful, there needs to be buy-in from all levels of the organization, not just HR. Ongoing rewards and recognition programs, that ensure employees are recognized on an ongoing basis and are tied to a company’s core values, will have the most positive impact and influence. This survey shows 44% of employees don’t currently feel their recognition programs are tied to their organization’s core values and yet it is essential to a meaningful recognition program that the two work in tandem. How well an organization develops its culture of recognition is going to have a direct impact on turnover rates which is why, to be successful, there has to be corporate-wide buy-in and participation.

Social Media
This is a trend on the cusp of exploding. It is being widely and successfully used for talent acquisition, yet its application for use in rewards and recognition programs is still in its infancy stages. The report notes that more than 82% of companies aren’t including social media in their rewards and recognition programs at all and 55% don’t want it. This is surprising because social media has become a mainstay in our everyday lives. This slow uptake suggests there is an enormous opportunity for social media to play a role in rewards and recognition and it will be exciting to see how it is developed and used in the coming years.

In conclusion, employee engagement impacts turnover rates and given that engagement levels are at an all-time low, it is not surprising that companies are looking to revamp their recognition programs. Trends such as early recognition, developing a recognition culture and incorporating social media must be considered in the planning process to increase productivity and decrease turnover rates.

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