Retention rates in 2021 were frightening. In November, we witnessed what some now call the “Great Resignation,” when a record number of 4.4 million people left their jobs. But it didn’t stop there. A trend toward high staff attrition continued for the rest of the year. So much so that experts predict that 2022 may see higher turnover rates than before the pandemic.
In 2020, the average U.S. turnover rate was 57.4%, meaning that as many as over half your staff might quit, face redundancy or termination within a year. Unfortunately, turnover has always been expensive, costing businesses 6-9 months of the employee’s salary on average.
All this to say, now more than ever, staff retention is essential. The reason is simple: In December 2021, there were 4.6 million more job openings than unemployed workers. In other words, competition for talent is fierce, making it increasingly difficult for companies to find the right fit.
In light of this, we’ll examine a few staff retention hacks that can help to minimize staff turnover.
Let’s start with the most obvious solution that many businesses hesitate to implement: pay raises.
Compensation plays a massive role in whether employees feel valued. Interestingly, during the pandemic, 69% of workers (particularly low-wage employees) found they would receive more money in benefits than working their jobs.
So it’s no wonder that when job openings increased in 2021, many workers took the opportunity to look for better-paying positions. As many as 72% of those earning less than $30,000 per year intended to seek new employment.
This begs the question: Are you paying your employees fairly and competitively?
The truth is that not all salaries are fair. According to the U.S. Bureau of Labor Statistics, although wages are up 0.4%, employees face an hourly wage decline because raises don’t match the consumer price index. So as living costs go up, salaries need to follow, and sadly, that isn’t always the case.
Needless to say, offering a competitive salary is the first step to retaining your workforce - especially when the labor market is this tight. However, if you’re unsure what a ‘fair salary’ is for the roles you’re looking to advertise, compensation analysis tools like LaborIQ can help. This software makes it easy to populate the average salary based on location, job title and market trends. With this info in-hand, you’re much better positioned to ensure competitors aren’t able to poach your workers with a higher compensation offer.
Offer Career Growth
Around 33% of employees quit their jobs because they’re bored and want to enjoy new opportunities. This is why offering professional development, training and career progression opportunities is imperative to keeping employees engaged.
One way to help shape the future careers of your staff is to understand what skills and training are necessary to promote workers to more senior roles. Then, using this information to create and provide relevant professional development opportunities. This doesn’t have to break the bank.
For instance, businesses can:
Appoint mentors to junior workers
Fund online training programs
Set aside time where employees can research and develop skills relevant to their career progression
Be More Flexible
The pandemic forced many businesses to test drive remote working arrangements, and for many, it proved more successful than anticipated. So successful, in fact, that 97% of employees don’t want to return to the office full time.
Remote work enables staff to spend more time with their families, take care of household chores, save time and money on the commute, and generally enjoy a better work-life balance. It also offers more flexibility to working parents and even, in some cases, those with dreams to travel.
Enabling a hybrid model or even allowing full-time remote work could be a significant factor in convincing your employees to stay.
Boost Your Staff Retention Rate
Boosting staff retention during this era requires businesses to offer employees what they need - namely, more flexibility, better pay and greater professional development opportunities.
Offering better compensation might be a worthwhile cost that pays off in the long run. With comprehensive compensation analysis, not only can you keep tabs on what a competitive salary actually is, but you may also find lower cost hiring opportunities in remote locations. This is especially true if you’re willing to offer flexible work models. So check out LaborIQ to make informed compensation decisions and put your business ahead of the competition.