OK let’s kick this off with a shocker stat - did you know that replacing an employee can cost up to 30% of their annual salary? You’d think this significant expense alone would motivate managers and team leaders to prioritise keeping their workforce satisfied…
Beyond the financial impact, employee turnover also affects team morale, drains internal knowledge, and of course there's the considerable time and effort it takes to onboard replacement hires. Despite these costs, employee happiness and retention often aren't at the forefront of managerial concerns. But why?
In the ever-evolving world of IT, where success is measured by metrics like sprint completion or billable hours, it might be time to add employee retention to the list of key performance indicators. Research shows there’s a direct correlation between improving employee happiness and staff retention, which not only boosts profits but also elevates your company’s stock value - it’s a win-win! Essentially, if your staff are happy, then so are your business accounts.
What does it take to Improve Employee Retention?
Studies suggest that happy employees are more likely to stay in their role, while unhappy ones are often on the lookout for new opportunities. So, one effective way to improve retention is to make sure employees are happy. Here’s how.
Firstly, improving employee happiness isn't as simple (and easy) as pizza on a Friday and a pool table in the staff room. Aside from excluding those who work remotely, these sorts of perks can contribute to a positive environment, but real, true engagement requires time, effort from the top down, and sometimes significant changes to workplace culture. However, it’s totally worth it! These efforts and investments pay off in the long run, leading to a more positive and productive workplace with retained, happy staff who want to do a good job for your business.
A Framework for Workplace Happiness
There are numerous ideas on how to create a happier workforce, from popular blog opinions to the findings of scholars like Arthur Brooks, who has spent decades researching workplace happiness. One that we’ve found to be a particularly useful guide comes from the US Surgeon General, whose framework for workplace well-being provides a comprehensive and straightforward approach.
The Surgeon General identifies five core essentials for transforming the workplace into a hub of employee well-being. These essentials are based on ten fundamental human needs, which align closely with Maslow’s hierarchy, which you may already be familiar with (but if not, here’s a reminder). A business doesn't necessarily need to address them in a rigid sequence however.
Here’s a breakdown of the essentials:
When you sit back and look at the essentials, it’s not rocket science - our human needs don’t change when we are at work, so it only makes sense that they appear on this list. By focusing on these areas, organisations can cultivate a happier and healthier workforce, which in turn drives better performance and improved retention.
What's Next?
In the coming weeks, we’ll dive deeper into each element of this framework, examining how they relate to team happiness and employee retention. We’ll also share actionable strategies that companies can implement to enhance employee well-being.
If you're grappling with retention issues in your IT team, we'd love to hear your experiences and offer advice. Don’t hesitate to reach out to our Head of Partnerships, Richard Clarke, at richard.clarke@evolved-ideas.com.
Alternatively, if you’re interested in bolstering your team or outsourcing development, and want to learn more about how we apply the science of happiness to create highly skilled, cohesive teams through Evolved Teams, feel free to contact us through the link below.