Employee retention is crucial for organizational success. High employee turnover can lead to significant costs, including recruitment expenses, training new hires, and the loss of institutional knowledge.
A key factor influencing retention is the quality of feedback that employees receive. High-quality feedback is clear, relevant, and actionable. It helps employees understand their strengths and areas for improvement, provides them with a clear path to advancement, and focuses on work, not personality.
While there are several aspects that contribute to employee retention rates, the quality of feedback offered to employees is one of the most critical factors that determine whether they stay with the company or not.
In this blog post, we'll discuss the effects of feedback quality on employee retention rates and explore ways that organizations can improve their feedback quality to retain their most valuable asset: their employees.
Feedback quality and employee retention
It is important to establish that feedback quality directly impacts employee retention rates. In fact, our recent research revealed that individuals receiving low-quality feedback are 63% more likely to leave their organizations within a year than those who are receiving high-quality feedback.
This statistic should be a wake-up call to organizations focused on retaining top talent. When employees receive inadequate feedback, they are likely to feel unsure of how they are performing and what is expected of them, and uncertain about their role in the company. This, of course, can lead to feelings of disengagement and frustration.
Additionally, our findings show that 38% of individuals exhibit attrition risk in their current roles, meaning they are either contemplating leaving their current workplace or have already been interviewed elsewhere.
Recruiting doesn't matter if your best hires quit
Research consistently shows that organizations with greater diversity in race, ethnicity, gender, age, and other traits tend to outperform their counterparts. However, simply hiring a diverse team is not enough. Retaining these talented individuals is crucial for meaningful progress and business growth. Recent findings from our report revealed a strong relationship between feedback quality, employee retention, and bias:
- Individuals receiving the least actionable feedback are more likely to leave their organizations.
- Individuals receiving the least direct feedback are more likely to leave their organizations.
- Women of all races, as well as Black and Hispanic individuals of all gender identities, consistently receive the least actionable and direct feedback.
These insights have significant implications for diversity, equity, and inclusion (DEI) efforts. It's crucial to recognize that the groups consistently receiving the least actionable and direct feedback are already underrepresented.
How understanding workplace expectations affects attrition rates
Understanding what is expected of them plays a significant role in an employee's decision to stay with their current employer.
According to our recent study, 61% of people planning to stay with their current employer report clear understanding of workplace expectations. This understanding empowers employees to perform their tasks effectively and to strive for professional growth within the company's parameters.
In stark contrast, only 21% of those planning to leave their current employer share this sentiment. The lack of clarity and understanding within this group suggests a significant feedback quality problem. It underscores how critical it is for organizations to provide high-quality feedback that helps employees understand their roles and responsibilities better.
What about a lack of feedback?
When employees do not receive regular feedback, they are unable to assess their performance, improve their skills, and contribute effectively to the organization.
This lack of feedback can lead to demotivation, a sense of neglect, disengagement, and ultimately, attrition. Feedback plays a crucial role in creating a supportive environment where employees feel seen, recognized, and empowered to excel in their strengths while working on areas for improvement.
People don’t leave jobs, they leave managers
The belief that people quit jobs because of their managers is well known. According to a survey by Kronos, a tech company, employees who rated their managers poorly were more likely to leave the company. Those with managers in the bottom quartile had a nearly 25% higher likelihood of leaving compared to those with managers in the top quartile. Interestingly, when low-scoring managers improved through discussions and individual coaching, their team's desire to stay also improved.
This is significant for two reasons:
- It shows that with the right tools and support, management skills can be enhanced.
- It shows that most employees welcome their manager's improvement, and even those who were planning to leave can change their minds if they see positive progress.
Managers in various industries and roles lead and support their teams in multiple ways. They provide a vision, assign tasks, and advocate for their team. They also play a role in determining promotions and have a say in compensation. Additionally, they offer feedback and coaching. Interestingly, the failure to provide effective feedback was one of the top criticisms given by employees in the Kronos study.
The Kronos team is not alone in their findings. In fact, most people in most organizations desire more feedback. According to a Forbes summary from last year,
- 62% of individuals wished they received more feedback than they currently do
- 83% stated that they appreciated receiving feedback, whether positive or critical
- Almost all (96%) agreed that ongoing feedback is beneficial
- 4 out of 10 become disengaged when they receive little or no feedback from their manager
As organizations grapple with the challenge of employee retention, improving the quality of feedback provided to employees emerges as a pivotal strategy. Good feedback is specific, relevant, and actionable. It comes with clear examples and clear suggestions for improvement, and can empower employees, enhance their job satisfaction, and subsequently, increase their likelihood of staying with the company.
It's not just about providing feedback generally, but also ensuring its quality, that can make all the difference.
Implementing effective solutions to improve feedback quality
To improve feedback quality, organizations should create a culture of constructive feedback that focuses on employee development.
Prioritizing giving and receiving quality feedback shapes the culture and success of an organization. By investing in effective feedback practices, companies can create an engaged and successful workforce, and regularly assessing feedback quality and making necessary improvements is important to ensure employees feel valued and supported.
Managers should be equipped with systems to generate more efficient, fair, and effective feedback, ensuring the team's continuous growth and development.
Investing in employee training programs can equip managers with the knowledge to deliver high-quality feedback, creating a positive work culture. Or consider exploring tools like Textio Lift, a platform designed to uplift the traditional performance management process by coaching managers to make feedback more direct, actionable, and bias-free.