6 strategies to counter rising employee turnover in Singapore

Employee turnover has been reported in Singapore at 15.6% in 2013 which is up from the 14.1% we experienced in 2012.

As we enter the second quarter of 2014 and economic growth continues in this growing city, it is expected that turnover will increase yet again. Employee retention has therefore become a critical issue for most firms operating in the Lion City.

Outlined below are 6 top strategies that have been identified to enhance employee retention going forward.

#1 – Corporate Pension & Retirement Benefits

A corporate pension plan is a formal arrangement between employers and employees to provide funding for the retirement of the employee. This can be on an employee-contribution-only basis or a co-contribution basis with employers matching a percentage of the employee’s salary.

The pension plan can be funded with regular contributions from employees and/or employers creating a disciplined savings vehicle for employees to plan and save for their retirement.

By displaying an active interest in the retirement well-being of employees, companies can significantly increase staff retention and therefore reduce turnover costs.

A corporate pension plan can be set up at very little cost to the company, particularly if there is no co-contribution schedule in place. This still offers a significant benefit to employees providing them with a cost-effective and disciplined method to save for retirement.

#2 – Employee Recognition

Employee recognition refers to the process of identifying staff members who have made positive contributions and providing positive feedback to let them know they are valued and appreciated members of your workforce.

This can be carried out in a variety of ways, whether it is through simple ‘thank you note’ provided by management or a more formal recognition process implemented by the company. A well-constructed employee recognition program can ensure that your employees feel valued for their contribution leading to greater motivation and improved employee retention.

This is reinforced in the table below outlining the results from a survey of employees. It highlights that 68% of employees acknowledge feeling more appreciated for their contributions to the company.

Employee recognition is one of the most important strategies to drive retention of top-performing staff members. Current programs can be reviewed to determine if they are effective in motivating new staff as well as the long-term members of the workforce.

#3 – Opportunities for Career Growth & Progression

Developing a career growth and progression path for your employees refers to the process of creating alignment between where the employee wants to progress to and where the organisation requires them to be.

Research shows that career development results in greater employee satisfaction and performance, leading to positive results for the overall business. Talented staff will always want to advance in an organisation for a multitude of reasons including professional titles, increased responsibilities, and the respect of others within the organisation.

It is important that employers recognise that the key focus of employees is not necessarily on the organisation, but rather it is on their own careers. By creating an alignment between the employee’s progress and that of the organisation, employers can ensure greater engagement and retention of staff.

It is important that employers review in-house career development policies and procedures and review their effectiveness with top-performing employees. If there are areas of weakness, then focus should be placed on creating a greater alignment between the goals of the organisation and those of employees.

#4 – Performance-Based Rewards

Performance-Based rewards and compensation refers to a ‘pay-for-performance’ style arrangement of paying employees relating to how well they perform.

This has typically been the arrangement for many years within sales-based industries such as financial services, auto sales, and general sales; however it is starting to be adopted across a broader range of industries.

This is the direct result of employers recognising the potential of such a model in increasing employee performance and therefore retention.

In today’s competitive labour market, with strong regional economic growth, employers who are not offering performance-based rewards may be placed at a distinct disadvantage to those that are.

#5 – Wide Range of Benefits

Employee benefits refer to those benefits paid to employees that are non-cash compensation provided in addition to their salary. These employee benefits vary between firms and industries but will generally include health insurance, life insurance, medical benefits, dental benefits, vacation, pension, and other general benefits.

Many employers in Singapore and the region recognise the value of providing a broad range of benefits. 40% of employers in Singapore now spend more than 20% of their company payroll on employee benefits (Towers Watson, 2012).

It is recommended that employers review their current range of benefits offered to employees in combination with the statistics highlighted and decide on whether this is the most appropriate allocation or could be improved.

#6 – Employee Growth & Learning Opportunities

Learning and growth opportunities for employees of today not only refers to formal training programs and workshops but also extends to mentoring, coaching, and more informal opportunities to learn.

Many employers today also encourage staff to join their professional industry bodies, volunteer organisations and attend regular networking sessions to continue enhance their skills and knowledge.

Employers should provide their staff, particularly the top-performing employees, with regular opportunities to enhance their learning and skill sets. This could be through in-house soft-skill workshops or external events.

Regular victories for employees and an active investment in the learning and growth of your employees can ensure greater engagement and therefore improved retention.

Retention is clearly a global concern, so it is important that employers understand the factors that drive long-term loyalty and service amongst employees, as well the benefits that employees value most in today’s economic environment.

As strong economic growth continues and the jobs market in Singapore and the region becomes even more competitive, it is vital that employee retention is a key strategy for companies going forward.