Currently, many industries are having difficulties in hiring, and retaining, people -- especially at the lower tiers of pay/benefits. But there were problems with retention of people well before the pandemic hit. It is something that has grown out of many factors.
Over the past 40 years, I have personally interviewed hundreds of people and hired several dozen. When I started interviewing, the resume usually indicated one of two conditions. There were the people just coming out of college with, likely, no experience in the field (and, often, with no non-academic experience at all). Then there were people who were moving from one company to another. Career changes were possible but, in those days, it was not a voluntary choice very often.
Those people who were changing companies usually had five or more years at the prior company. Ten or more was not unusual. Over the years, this shifted. The new folks out of college have stayed the same -- though there has been greater competition to hire them. But the tenure of experience of the people changing companies has continued to shrink. When I started work, the general expectation was that you were making a commitment to stay for at least three years to "pay back" the company's recruitment and training costs. Now, three years at the prior company is closer to an average amount of time.
I continue to monitor the work histories of those I have interviewed/hired, and those whom I have considered approaching. The resume of those of today is much different. I have four companies (in 40+ years) on my resume. I just noted the work history of someone recently hired at the C-level for a large corporation and, over a 25 year history, their average tenure at a company was around 18 months (around 16 companies -- though, as I recall, they worked at the same company for more than one sprint). (Note that, if my resume had the same pattern, I would have worked for 27 companies rather than four.)
Retention can be voluntary/involuntary, encouraged/discouraged, expected/surprising. Having a low retention rate does not inherently indicate problems within a company. Having high retention isn't automatically a good thing depending on how well the people maintain, and grow, their skills.
But corporate practices do influence retention rates. Sometimes, in anticipation of employees expected to "job hop", a company will create policies that effectively encourage such. Some types of factors involved include:
- Corporate culture. What is the environment? Are most people long-term hires or are they new hires? Do people expect to stay for a while? Note that low retention is a large factor affecting corporate culture because traditions, and expectations, do not have time to solidify (that might be good or bad depending on other factors).
A company that has a lot of "long timers" will encourage retention. - Management. Does management support the next lower level(s) of employees? Is management doing THEIR job -- of training, support, career growth, removal of obstacles, working with the employee about non-work situations? The "Peter Principle" is often most visible in a company within management.
Good management provides an environment where people WANT to stay. - Rewards & compensation. Does the company maintain competitive salaries and benefits for people? At one company, they were forced (by competition of resources) to pay market rates for new hires. But that did not continue -- each year, the loyal employees were contra-rewarded with salaries that were progressively more and more below market rates. This applied even to the "rock stars" --people rated in the top 5 to 10% of the personnel. Salary isn't everything but knowing that you can increase your salary by 25 to 50% by moving can be very attractive. Knowing that the company is deliberately paying lower than market rate can also be very difficult to compensate for in concern with morale.
Continuous competitive wages and benefits encourage retention. - Opportunity for growth. If they are encouraging you to leave while also providing educational/experiential opportunities it can be very confusing. Some companies have said "why should I train them when they will just take that elsewhere?" The more appropriate question is "how can I reward them for continued growth and value?"
Grooming people within the company allows the company the option of using these new skills and discourages job hopping. - Criteria for promotion. Related to compensation, I was in a situation where, in order to be promoted, a person needed to have compensation int the correct region for the new pay grade. With deteriorating salary competitiveness as well as promotion requirements, I was once unable to promote a person. Their effective salary kept reducing so quickly that I could not give them enough money to get to that next pay grade. They left.
Accessible internal promotions encourage retention. - Other factors of promotion. Many companies have dual (sometimes even three or more) ladders to allow promotion within a skill, and preference, set. But many companies may require a transfer between ladders (from technical to management, for example) to be promoted as manager. And the criteria for promotion is based on the original ladder and not the new ladder. So, a very competent technical person may end up as a much less than competent manager.
Promoting for skills used within the new position encourages retention. - Making a difference. In past years, making a difference meant doing well for the company and the company, in its turn, recognized and rewarded you for those efforts in support of the company. Presently, that making a difference may be interpreted much more globally -- how does the work positively affect the world outside of the company area?
Pride and satisfaction encourage retention.
Of course, it the company does NOT want to encourage retention, just do the opposite of what is listed above.
Once again, retention rates do not indicate a single specific situation. But most would agree that acquisition, training, and incorporation into a company are a significant factor in overall cost and productivity. Encouragement of factors that lead to retention of productive employees should be of benefit to most companies.
