Recommend two interventions that could be designed to improve the retention of staff, justifying why they are appropriate to your organisation. (AC 3.3)
In the modern, ever-changing job market where employees are more mobile than ever, the retention of staff has become a major issue (Chiat and Panatik, 2019). Employee turnover is a concept that describes the number of people who quit their jobs, and retention is the organization’s capacity to hold the skilled workers (CIPD, 2021). Despite a bit of attrition that is sometimes experienced, turnover at a high rate leads to a shortage of staff and expertise, costly recruitment efforts, and reduced employee productivity (Cioca, 2018).
For this reason, it is necessary to investigate the retention statistics of the staff to uncover any problems or trends that may affect the retention rates, and by doing so, the companies can better address these challenges, keep the level of employee engagement high and decrease the attrition (CIPD, 2021). Organizations can achieve long-term career growth as well as lower attrition rates by implementing succession planning and talent management which can be identified through data analysis.
It is imperative to create effective solutions to address the issue of employee retention in the “Big 4” accounting firms: EY, Deloitte, PwC, and KPMG. This task aims to come up with two projects that these companies should undertake.
In the past, the Big 4 accounting firms have had fine-tuned attrition rates mostly due to the new graduates who were ready to earn much lesser salary than the experienced accountants but this is in the past due to the services they offer. Nevertheless, the Brits have faced alarming defection rates in the recent periods thereby necessitating the import of workers who may be strangers to UK tax and accounting standards. The high attrition rates are caused by different factors, such as the long working hours during peak seasons and the low pay.
The majority of those who work overtime are not compensated for the extra time and hence they live under the feeling of being neglected and overworked. An additional problem is that there is little room for personal growth with no movements or a very long road to becoming a partner (usually 15 years or longer). The employees’ morale has also been affected by the firms’ involvement in accounting scandals and subsequent financial penalties. To improve retention, it’s important to stress career growth and create a working atmosphere that rewards and encourages the mental health of workers.
Recommendation one: Employee Remuneration
Offering a competitive compensation package with benefits helps employers keep their workforce as it brings them not only financial stability but also job satisfaction. In today’s economy, with the cost of living rising and the earnings being stagnant due to inflation, this is very important. These factors contribute to the trend that job searchers focus more on compensation and rewards. (Yonak, 2023).
The Big 4 should diverge from the trend by boosting compensation packages and re-examining their policy on overtime payment for office staffers. These companies often put their workers to work beyond their contractual obligations, which lead to a high turnover rate when this extra effort and its effect on work-life balance are not taken into account. With the introduction of fair pay policies and overtime pay, the manager will need to consider twice about allocating extra hours to employees to be wary of the impact it may have on the company’s bottom line. Thus, this policy aims to improve the living conditions of workers through decreasing the long working hours, burnout, and work-related stress.
Although it is generally known that other factors apart from compensation are responsible for employee retention (CIPD, 2015), fair pay still plays a very important role in the happiness and motivation of workers. As Herzberg points out in his two-factor theory, people tend to leave the organization when they feel that the reward they get does not compensate them fairly, and there is a close relationship between low job satisfaction and “hygiene factors,” like pay (Herzberg, 1959). It should be taken into account that hygiene factors are not categorical and vary from one employee to another depending on their issues and needs.
Recommendation Two: Career Development
Besides, big accounting firms have a paradoxical problem – they recruit and teach the best graduates in the profession, however, fail to retain most of these personnel. Usually, only the most ambitious and future-oriented people who long to be partners remain with the firm. Even though it takes two decades to become a partner through the slow and convoluted path of partnership, many still decide to leave the company.
Although some percentage of staff agencies is beneficial for a company, any more is a complication, especially in cases where talents don’t get their due. Thus, it is necessary to develop the right ways of keeping skilled people from leaving the organization. In this regard, a talent development program can be a good instrument to make the period required to transfer to senior management positions to be from 15 years to 5 years, ideally.
To retain top talent, use the 9-box grid assessment. Big 4 companies underutilize accounting skills but it’s strategic to provide growth opportunities to high-performing colleagues through coaching, shadowing, and mentorship with senior management.
Internal mobility facilitates employee retention and engagement as people tend to take up challenging roles and enhance their personal growth within the business environment. This interaction facilitates the development and the feeling of belonging which in turn affect the attitude of employees towards the growth opportunities and training.
Thus, the staffs are encouraged to work hard and achieve their self-actualization needs, which come in Maslow’s hierarchy of needs. Research by LinkedIn proved that the employers that give their workers such chances are 75% more likely to be loyal to the company. When an organization invests in people, it is a good move from a business point of view as the recruitment costs are decreased, employees are motivated as a result, the attrition rate also goes down, and the organization can fill the skill gap without losing proficiency. Career development increases positive impacts in every sphere.
Ultimately, one could conclude that the Big 4 public accounting companies are actively involved in an intensive struggle in the labour arena for the retention of their employees. Two potential solutions have been proposed: job salary growth with a clear career path through functional job education and worker development. These companies can ensure competitive pay, recognition of overtime work, and the creation of opportunities for professional development to increase employee satisfaction, lower the turnover rate, and keep the best staff. One of the crucial aspects in this regard is to value staff retention. It will lead to long-term gains and the organizational productivity will be increased.
Chiat, L.C., and Panatik, S.A. (2019) ‘Perceptions of Employee Turnover Intention by Herzberg’s Motivation-Hygiene Theory: A Systematic Literature Review’ Journal of Research in Psychology, Vol 1 (2) [Online]. Available from: https://doi.org/10.31580/jrp.v1i2.949 [Accessed Day 25 Feb. 2024].
CIPD (2015) ‘The changing landscape of reward’ [Online]. Available from: https://www.cipd.co.uk/podcasts/changing-landscape-of-reward [Accessed Day 24 Feb. 2024].
CIPD (2021) ‘Employee turnover and retention’ [Online]. Available from:
https://www.cipd.co.uk/knowledge/strategy/resourcing/turnover-retention-factsheet [Accessed Day 25 Feb. 2024].
Cioca, I. A. (2018) ‘Employee Turnover: An Evidence-Based Approach to a Thorny Issue’ [Online]. Available from: https://scienceforwork.com/blog/evidence-based-employee-turnover/
[Accessed Day 24 Feb. 2024].
Herzberg, F., Mausner, B. and Snyderman, B.B. (2017) The motivation to work.
Lewis, G. (2022) Industries with the highest (and lowest) turnover rates, LinkedIn. Available at:
https://www.linkedin.com/business/talent/blog/talent-strategy/industries-with-the-highest-turnover-rates [Accessed Day 27 Feb. 2024].
Yonak, R. (2024) ‘Hiring Trends Index: a look at the recruitment landscape of Q4 2022’ [Online]. Available from: https://www.totaljobs.com/recruiter-advice/hiring-trends-index/ [Accessed Day 27 Feb. 2024].
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BIBLIOGRAPHY
Use the space below to include any sources referred to but not directly cited (eg books, articles, websites) within your assessment.
Forbes. (2023). How Internal Mobility Can Help Retain Your Best Employees. Retrieved from: https://www.forbes.com/sites/forbestechcouncil/2023/05/10/how-internal-mobility-can-help-retain-your-best-employees/?sh=a55e1e539c1b [Accessed May 04. 2024. 2024].
Newhall, S. (2015) ‘Aligning the talent development and Succession Planning Processes: Don’t allow critical leadership talent to fall by the wayside’, Development and Learning in Organizations: An International Journal, 29(5), pp. 3–6.
Timmes, M. (2023): Internal Mobility: The missing piece of 2023 business strategy Forbes
[online] available at: https://www.forbes.com/sites/forbescoachescouncil/2023/02/17/internal-mobility-the-missing-piece-of-2023-business-strategy/?sh=400f542427f3 [Accessed Day 27 Feb. 2024].
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