Mistakes CFOs should avoid to keep employees from quitting

A rift seems to be developing between companies and their workers, who disagree about the reasons employees seem less engaged at work these days. Recent research shows differences of opinion between employees and employers on the top causes of workplace stress and the reasons workers leave for other jobs.

Companies around the world are concerned about losing talent, which can lead to higher recruiting costs and more stress on remaining workers who must pick up the slack.

Organisations should direct more attention to retaining employees by listening to their workers and fostering an open culture, said Beth A. Berk, CPA, CGMA. That way, employees feel they’re being heard – and are less likely to consider walking out the door.

Companies can’t always award hefty salary increases, and they shouldn’t make promises they can’t keep, said Berk, an independent recruiter.

But there are some things organisations can do, according to Berk:

• Change the culture at the office. For instance, the company could change its dress code and offer more flexible work arrangements.
• Offer more time off, paid or unpaid. Some people are willing to take some unpaid time off, depending on the circumstances, Berk said.
• Improve benefits or hold the line on benefit costs. Consider adding long-term care or improving the contribution to an employee’s retirement plan.
• Empower employees. Allow them to be part of the decision-making process. Especially if a company is in the midst of change, employees want to have some say in the changes.
• Assign workers to special projects. Employees and employers both stand to gain when a worker gets a chance to add new skills and interact with others in the company.

In general, firms must do a better job of understanding employees’ needs. This process includes the realisation that sometimes an employee’s goals or needs can change over time. And companies should work toward better understanding the causes of stress at work, according to a recent Towers Watson survey.

“People are so overloaded and stressed out with their professional lives, personal lives, commuting, taking care of other family members, there really isn’t time set aside for that one-on-one discussion with their boss,” Berk said. “Companies should find a better way to have a conversation with employees, especially the ones they’d be hard-pressed to lose.”

Sometimes, however, the needs of an employee are financial, according to two surveys commissioned by global staffing firm Robert Half.

CFOs are aware that inadequate salaries and benefits are the main obstacles to retaining good employees, but they underestimate how many employees are fed up with inadequate compensation, according to polls of more than 2,100 CFOs and about 300 office workers in the US.

Thirty-eight per cent of the polled office workers picked inadequate compensation as the most likely cause for good employees to quit their jobs, compared with 28% of the polled CFOs.

The survey results suggest CFOs could also be better tuned in to other reasons that prompt good employees to quit.

CFOs underestimated how many employees are unhappy with management (14% of CFOs and 16% of office workers), the third most frequently ranked reason for quitting, and how many are bored (8% of CFOs and 10% of office workers).

And CFOs may overestimate how overworked and underappreciated employees feel.

Twenty-two per cent of CFOs said limited opportunities for career advancement were the most likely cause for good employees to quit their job, compared with 20% of employees. Twelve per cent of CFOs picked too much work, and another 12% said lack of recognition. Only 9% of employees listed too much work as the most likely reason to quit, and 6% cited lack of recognition.

In addition to making sure salaries and benefits are competitive, CFOs and managers interested in retaining good employees should also do the following, according to Robert Half:

• Offer a career path. Without a defined career map, employees may not see an incentive to stay. Work with staff to identify potential advancement opportunities and the resources needed to pursue them.
• Offer training. A lack of skill-building tools and mentorship or continuing education opportunities can hinder a business’s effort to keep and groom future leaders. Career development and training can help people feel more engaged and supported by the organisation.
• Customise recognition. Every employee has different motivations and needs; one size does not fit all. Offer rewards and incentives the staff will value, and personalise them as much as possible.
• Listen. Employees who feel they have no voice in business matters may leave. Maintain open communications and seek regular input from others. Let employees know they are heard, and act on their good ideas.
• Track retention. The situation is not likely to improve at companies that don’t measure employees’ quit rates and managers’ staff retention rates. Identify managers who retain their best people – and those who don’t – to help the business understand what makes a good leader, and provide coaching to those who are falling short.

Related CGMA Magazine content:

“Inadequate Staffing Levels Are Primary Cause of Workplace Stress”: One in three workers regularly experiences excessive pressure at work. This high level of stress has a negative impact on employees’ productivity and engagement.

“Companies Aware of, but Not Acting On, Need to Alter Engagement Strategies”: Most companies are aware of the need to focus more on employee engagement, but few say they are doing enough to adapt to coming changes.

—Sabine Vollmer (svollmer@aicpa.org) and Neil Amato (namato@aicpa.org) are CGMA Magazine senior editors.