In this current business environment, many organizations are fixated on recruiting as the key driver to business success and recovery. Many of our clients’ growth has been limited by not having enough employees in certain positions to be able to grow or even maintain their current revenue levels. This seems logical given the unpredictable labor market, positive trending economic indicators and the continued state and local relief efforts. However, many employers seem to forget that retention of employees, especially key employees, has been one the main reasons that organizations have survived over the last year. As an organization, it may seem counterintuitive to push retention when many organizations have had to trim costs and make adjustments to cope with lost revenue. Some organizations had the opposite experience, they saw a surge in business productivity during the pandemic and may have seen an increase in revenue. In both scenarios, having dedicated employees and retaining current employees has helped organizations manage the ups and downs of the previous year. But what can a business do to retain employees in this pandemic and moving forward? There is no single solution, but there are steps employers can take assist in retention efforts.
Over the last year, employers and employees have been forced to be flexible in their approach to business strategy and daily work efforts. This has led to stress for both employers and employees. Employees value an employer who is willing to work with them on issues that cross both our work and personal lives. This does not mean the employers need to agree to every employee demand, however providing flexibility will help in the effort to retain dedicated employees. And in most cases, this does not cost the business a dime. Some issues that may need further consideration are time off, including the need for unscheduled time off, remote work options, and adjustments to work schedules. Employers should consider the ROI when reviewing their options. Do I want to risk losing a valuable employee or employees by not approving this request? Just remember, your employees have lots of other employers courting them. The bottom line in this current business environment is if you are not nimble and flexible in your approach some other employer will be and that may mean the loss of a key employee.
Over the last five years, there have been countless perks thrown around as keys to employee retention. Things such as working from home, stay bonuses, free lunches, a laundry list of alternative insurance programs, employee discounts, social events, and pet and family friendly offices. While all these items may have a positive impact on company culture, the previous year has shown that what employees care most about is pay, health and welfare benefits and technology.
There is a current debate regarding minimum wage standards at state and federal levels but under the surface of all the talk, there has been a phantom inflationary increase in pay rates. Some labor markets such as manufacturing and certain service sectors are seeing up to 20% increase in starting wages from pre-pandemic pay rates. It is truly an employee labor market, and the potential for other employers to poach dedicated employees is high, therefore it is important that employers review their current wage structure to determine a competitive wage level for their positions. This is certainly a significant cost burden for some employers; however, this trend does not seem to be subsiding anytime soon.
Regarding health and welfare benefits, employees continue to expect and will demand adequate health coverage. It is important that employers keep an eye on their benefits design. What plan features do employees use the most? What benefits do the employees not utilize? Although plan cost is important and considerable, we recommend employers thoroughly review the pros and cons to changing plans, reducing benefits options, and switching providers.
Finally, updated company technology and communication tools, which was once considered just a capital expense and a nice to have in some situations, has become a focal point of many organizations during the pandemic. Organizations have moved to remote work and employee expectations have followed in sync. How do we communicate with staff, our customers, or vendors? Organizations should consider a robust review of their current systems, are they current, compliant, secure and do they meet the needs of our workforce. Do employees have access to virtual systems, laptops, cell phones or should we provide a technology stipend to cover costs.
Know Thy Competitor
Employers in many industries are making radical increases in their pay scales and benefits programs to attract new talent as well as maintain their existing employees. This means that these companies are coming after your employees and unless you stay ahead of what your competitors are doing, you will lose your existing employees and you will not be able to attract top talent. You need to regularly monitor the labor market to assure that you are staying competitive.
Employee retention will be a driver of an organizations continued success, and although there is no one size fits all solution to retaining talent, the above suggestions are intended to give you some idea of what an organization can review to help them in their effort to retain talent.
For additional information on how your business can recruit and retain during this red-hot employment market, shoot me a note at email@example.com