The Great Retention Challenge
One of the biggest challenges employers are facing is the “turnover tsunami” that’s begun. With businesses ramping back up, it’s important for executives and managers to understand why this happening and how to increase retention in this unique time.
In 2019, quit rates of North American employees were surging high. Once the pandemic hit, quit rates sunk to the lowest they’ve been in nine years. Retention experts are now predicting a “turnover tsunami”, meaning a significant increase in voluntary job-leaving. That means, just as companies are starting to recover, they are being hit with more internal disruption than external: talent shortages.
While the news might prompt managers to start impromptu temperature checks with employees, it’s first important to understand why this is happening in the first place.
Why Now?
One reason is likely due to workers having put off job searches to maintain income security. Many jobs were lost during the pandemic, and opportunities became scarce. The job market shut down.
Burnout is another cause. As jobs were cut, many employees took on extra responsibilities and hours. Stress ran high, job insecurity became a constant, and remote employees in particular reported they worry managers doubt their productivity. The cherry on top is that many employees took less vacation prompted by an abrupt slow in travel. Altogether, everyone’s wick has been burning short.
The other reason is opportunity. As companies rebound, so too does the job market. 36% of employers reported they plan on increasing their hiring activity, which is up 57% from the previous 12 months. As the number of job listings increase and recruiters slide back into employee DMs, people will open up to making moves and acting on job dissatisfaction. At Ari Agency, we’ve also seen a dramatic increase in hiring over the last 6 months.
Prior to the pandemic, turnover was high and 81% of employees cited a positive overall wellbeing.
Recent surveys say that number has dropped to 68%.
Normally, people don’t think about leaving their job every day of every year. Some kind of “shock” - such as a specific event or realization - causes an individual employee to leave. The pandemic, and our ongoing recovery, have become the wide-spread shocks that are synchronizing these decisions across employees. Employers who are proactive in retention efforts will be the least affected by this trend.
How To Increase Retention of Top Talent
The pandemic has caused people to re-evaluate what they value in a company and their job. Ongoing research shows employees are looking to see improvements in compensation coming out of the pandemic and new permanent forms of flexibility. Below are 3 tips companies can use to prepare for the “turnover tsunami”.
RE-VISIT SALARY BANDS
Reflect on whether your salary bands are where they should be. In 2020 and most of 2021, few employers gave raises despite increased employee workloads. Surveys show that half of workers think they’re earning less than they deserve and 18% will consider quitting if they don’t receive a raise by yearend.
On top of that, 52% of employers report that they would consider increasing base salary outside of their budget range to compete for top talent in the next 12 months. This will prompt salary bands in competitive talent pools to increase. It will also make recruiter outreach much more attractive, especially to employees whose salaries have remained stagnant.
TRANSFORM BENEFITS FOR THE NEW ERA OF WORK
Outside of salary, these were the top factors Canadian workers said were most important to them:
Benefits Package (53%)
Career Development (44%)
Worklife Balance (40%)
But which benefits exactly are most important and what does worklife balance look like to today’s workforce?
The pandemic caused over-night changes to how people worked. Many companies went fully remote and the hiring of part-time and contingency workers increased. Employees were forced to trial working as part of a remote and agile workforce. The outcome was an appreciation and desire for this flexibility beyond the pandemic. That’s why employees have reported these as the top desired benefits nationally:
Ability to work from home
3 weeks+ vacation time
Flexible working hours
STAY ON PULSE WITH EMPLOYEE SATISFACTION
Don’t wait for unhappy employees to self-advocate. It’s oftentimes considered a surprise when an employee quits, but it shouldn’t be. The signs are always there if you look for them. Furthermore, when one employee leaves, it often encourages other employees to consider why and if they should stay, causing a viscous cycle of turnover. That’s why identifying unhappy employees on an individual basis can help wide-scale retention.
Find ways to structure open and frequent conversations with employees about how they’re feeling. Show empathy and recognition for their work. And most importantly, show that you’re not just listening but acting. If an employee is burnt out, look for ways you can alleviate workload or provide a break. If they feel their development has plateaued, investigate what growth paths they can take and what opportunities there are internally or externally for them to be upskilled. If they have family or personal events impacting them, give them the time and flexibility. Each employee’s context will be different - which is why it’s important not only to make company-wide improvements but to get on a 1-on-1 level with your teams.
In sum
Like the economy, the job market has been through a rollercoaster. Now, it’s opening back up again. Employees have both the motivation and opportunity to make moves they’ve been holding off on. The employers who transform to meet the new needs of employees will not only retain talent through this era, but can even attract the top talent looking to make those moves.
We know the cost to replace an employee is high, and the disruption that happens when you lose a top performer is equally significant. Contact us today to learn about the new trends we’re seeing in retention and how we can help hire your next top performer.
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