The U.S. unemployment rate is currently at its lowest level since the start of the pandemic. Employees are resigning in record numbers, with more than 24 million people quitting their jobs between April and September 2021. Many have decided not to return to the labor force, and companies across the board are struggling to fill vacant positions.
Now is not the time to lose your top talent. If you don’t already have a retention plan in place to prevent staff losses, develop a strategy without delay. Here’s how to determine who you might lose, why they might go, and how you can potentially keep them on board.
Identify Reasons for Staff Turnover
Employee turnover is a big problem that cuts into profits and impacts competitiveness. Former studies by analyst firm Mercer showed average U.S. annual turnover at about 20 percent, with about two-thirds voluntary. However, that was before the pandemic got everyone rethinking their work-life balance and realizing they didn’t need to go back to the way things were before 2020.
[quotes]The four leading causes of staff turnover are lack of growth and progression, inefficient management, inadequate compensation, and poor workplace culture.[/quotes] It’s essential to identify if any of these issues exist in your company. The best way to do that is to ask your employees, either personally or anonymously through a survey.
Develop a Retention Strategy
Develop your employee retention strategy the same way you would approach any other business problem:
- Identify your objectives,
- Analyze strengths and weaknesses,
- Setting goals,
- Establish measurement criteria, and
- Specify a timeline.
Based on your investigation of the issues your employees face, you could decide to include some or all the following in your action plan.
Revise Locations and Working Hours
Pandemic lockdowns have given people the chance to work remotely, either from home or as “digital nomads.” Many discovered the benefits of skipping the daily commute, saving on clothing expenses, reducing their environmental footprint, and avoiding the high costs of childcare. [quotesright]This is one of the primary areas of dissatisfaction among current employees. [/quotesright]
Research by Ernst & Young shows a full 54 percent of hybrid workers would rather quit than return to the office permanently, so revising your location requirements and working hours is the first step towards retaining valued employees.
Review Worker Compensation
Money isn’t everything, but it is a big contributor to job satisfaction. The increase in remote work opportunities has created an array of career options for higher-skilled, professional employees. To beat the odds of losing them, it’s essential to review their compensation right now.
Even if your company can’t pay more right now, at the very least you should set a date for an upgrade that’s not too far off in the future. You could also consider an interim pay raise of 1-2 percent, just as a stop-gap measure.
Focus your review on jobs that fall into one of these categories:
- Positions difficult to fill or traditionally have a high turnover rate,
- Positions necessary to achieve business results, and
- Positions whose compensation has risen notably during the pandemic.
[quotesright]If any of these positions are occupied by hourly-paid workers or key professionals, they need to be your priority. [/quotesright]
Upgrade Employee Benefits
In many instances, it’s possible that upgrading your employee benefits and perks can convince a candidate to stay. [quotesright]Non-compensatory benefits can make a huge difference in a staffer’s life. [/quotesright]
For example, the pandemic caused many to appreciate the value of reliable childcare, which is traditionally a considerable expense for families. If you have several workers with young children, setting up onsite childcare with a registered provider could give you an edge in retaining employees.
Such a move could even help you recruit new staff, and the cost would be tax-deductible and spread across all users.
Offer Career Planning and Mentorship Opportunities
Since lack of growth opportunities is one of the main reasons for worker dissatisfaction, addressing this should also be a priority. Provide your workers with the chance to develop a career path that includes milestones such as promotions and transfers.
Discover what training they need to prepare for these milestones and make a plan to help them obtain it. Start a mentorship program where experienced employees can mentor others or seek outside experts to offer some of their knowledge.
Provide Wellness Services
Keeping your employees mentally, physically, and financially fit is good business, but the pandemic has prompted employers to expand wellness offerings. Employees feel supported by companies offering stress management programs, retirement planning services, and reimbursement for virtual fitness activities. [quotesright]Many of these offerings can be arranged at no cost by partnering with service providers. [/quotesright]
Reimbursement options require a financial commitment, but they are primarily tax-deductible for employers.
Benefits of a Comprehensive Retention Program
An employee retention program doesn’t just reduce damage to the company when key employees leave. It also gives you opportunities to improve performance across key areas.
Retention reduces the costs of advertising, interviewing, and onboarding new workers. It avoids productivity losses and potential customer service problems, increases workplace morale, and improves the ROI on training.
[quotes]Experienced employees are more likely to be engaged, take ownership of an issue, and problem-solve on their own.[/quotes] Company culture benefits, headcount remains stable, and owners and managers no longer need to focus their time on replacing lost staff but can attend to the running of the business.
There’s an old saying that “a stitch in time saves nine.” Taking steps to develop an effective talent retention plan before you lose key personnel can save you the hassle, heartache, and cost of replacing them.