New Study Offers Insights to Tune Generational Dissonance and Hit the Right Employee Retention Note
A survey of more than 600 U.S. workers shows the key to retention harmony between small business owners and employees is job stability and meaningful work, plus health insurance and retirement plans
Will they stay or will they go?
When it comes to employee retention, a new study suggests the generations move to a different beat.
A survey of more than 600 U.S. workers explored the challenges small and mid-size business owners face when it comes to retaining Baby Boomer, Millennial, Gen X and Gen Z workers, and the key drivers motivating each generation to bounce or stick around.
The survey, conducted in partnership with Paychex, the parent company of SurePayroll, and Future Workplace, an Executive Networks member company, reveals a gap between employer perceptions and employee sentiments related to retention.
The Stay Interview
One of the most compelling survey findings is there is no single factor motivating an employee to stay or go. Jason Copeland, SurePayroll General Manager (interim), sees that as an opportunity for small business owners.
“The survey shows that only 29% of employees have been part of a stay—versus an exit—interview,” said Copeland. “A stay interview helps an employer learn why an employee chooses to stay and helps identify areas for potential improvement. Stay interviews give an employee a chance to offer valuable feedback and for the employer to capture clues about employee satisfaction and engagement before they start looking for new opportunities.” Copeland notes stay interviews are especially important to regularly hold with your top performers.
Meaningful Work Matters
Attracting and retaining top talent continues to vex small business owners, with 4.3 million people quitting their jobs as recently as May 2022. That means small business owners should consider what programs, perks, and benefits will best meet the diverse needs of their employees.
When asked about factors (other than compensation and benefits) that contribute to their decisions to stay in with their company, 30% of respondents indicated that perceived job stability is their most important motivator and 60% ranked it in their top three. Feeling that the work was meaningful (45%) and having a passion for their field (33%) were the second- and third-most-popular answers, respectively. Reasons related to employers’ brands (19%), corporate culture (19%), and products (13%) are the least important to employees, despite many companies’ focus on these elements in their recruiting and retention efforts.
The Generation Gap
While job stability and performing meaningful work ranked among the top two reasons respondents stayed at their companies, Baby Boomers (32%), Gen X (35%), and Millennials (31%) were significantly more likely to cite job stability as the most important reason than Gen Z (14%). Instead, Gen Z (18%) prioritizes meaningful work over job stability.
In addition, Baby Boomers (41%) said that passion for their field and industry are among the most important reasons to work at their company. Gen X (30%) focused on close relationships with coworkers, and Millennials (39%) cited opportunities for career growth. Gen Z (27%) said company growth and success were especially important to them.
Flexibility Reigns as Top Priority
When asked what would make employees more likely to stay in their roles, respondents noted a desire for more flexible scheduling. More than one-third (35%) of all respondents ranked flexibility in work hours and schedule as the number one reason they’d be more likely to stay at their organization long-term, and 70% ranked it among their top three. It was significantly more likely for Baby Boomers (46%) to say that flexibility would make them more likely to stay at their organizations long-term than Gen X (38%), Millennials (31%), and Gen Z (24%).
Opportunities for career advancement, skills development, and internal job mobility, and increased commitment to work / life balance ranked second and third overall with 50% of employees putting each in their top three most-desired perks. A promise of better work / life balance was particularly compelling to financial services workers (29%) compared to those in leisure/hospitality (10%), manufacturing (11%), education/health services (14%), retail / trade / transportation / utilities (13%), and other professions (11%).
In it for the Long Haul
Health insurance (64%) and retirement plans (62%) are the top two benefits shown to keep employees long-term. However, the research shows that the importance of mental health benefits is on the rise among younger generations. Gen Z (23%) is significantly more likely to say that mental health benefits would make them more likely to stay at their organization long-term than Millennials (14%), Gen X (5%), or Baby Boomers (3%).
Financial wellness benefits (41%), such as tuition reimbursement, professional development stipends, student loan repayment, and child-care support, ranked third among benefits most important for employee retention.
Employee Retention Tips
Almost half of employees surveyed plan to say with their current company, leaving half considering a new opportunity. Consider these tips to impact your employee retention rate.
- Get Flexible. Workers highly value flexibility in when they work (working hours) and where they work (remote / hybrid / on-site). Take time to understand what’s meaningful for your employees.
- Check In. Ask employees what hard sort of wage and non-wage benefits are most meaningful to them. Before you do, make sure you know what changes you’re willing to support, and what best serves the needs of the business and its customers.
- Get Involved. Employees value employers who align with their personal interests and values. Involve employees in corporate responsibility, community outreach, charitable contribution, and sponsorship conversations.
- Invest in Development. Provide greater access to coaching, mentoring and sponsorship, along with skill development.
- Conduct Stay Interviews. Regularly talk with employees about what’s working and what’s not. A stay interview is always preferable to an exit interview.
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