With the US unemployment rate spiking in April to a high of over 14%, employers may assume that the current labor market offers a greater abundance of talent availability than at any point in recent years.
A deeper dive into the statistics tells a very different story.
As the post-coronavirus recovery continues, quit rates have climbed faster than job openings, and the overall Labor Force Participation Rate (61.4%) descended to a 43-year low. Taking industry-to-industry variance into account, employers may be drawing from a tighter labor pool than they were before the virus struck.
The bottom line: employee retention remains as important now as ever. Here are three things businesses can do to keep their employees happy and motivated in the current environment.
Prioritize employee retention initiatives. Retention initiatives can be a more powerful investment when compared to the downside associated with attrition. The costs associated with hiring, like total hours spent on talent sourcing, onboarding, production lag costs, and more, can add up.
Investing in employee retention initiatives isn’t as simple as putting a ping pong table in the break room. Especially now, retention can mean restructuring the entire employer/employee value exchange.
A lot of companies are creating long-term incentive plans, employee loyalty bonuses, increasing base pay to keep up with the market and rewarding high-performing employees. Those strategies are key now.
Companies need to put as much emphasis on employee retention as candidate attraction. There’s still a war for talent, and retention efforts will be rewarded.
Introduce more flexible employment policies. Rigorous employment policies in industries such as manufacturing and distribution have evolved to address production quotas, but the potential risk represented by rising quit rates may be enough to warrant readdressing them.
If an employee suddenly can’t show up on time due to changes in their children’s schedule, employers need to take that into account rather than sticking to rigid attendance policies that will scare off solid workers.
Looser and more varied policies such as work from home, flex time, half-shift availability, scheduling consistency or paid leave flexibility can all help persuade employees to stay. Such policies help in their own right, but also demonstrate a level of engagement by management your employees will be more reluctant to walk away from.
Employees in surging industries like distribution know it’s an employee market. If employees don’t feel valued, they know that one of 50 other employers will be available in a 20-mile radius.
Listen to the concerns of every employee. The recent rise in quit rates comes as workers prioritize childcare and safety concerns over working. According to a July 2020 Census Pulse survey, more than 34 million working parents of children aged 14 and under have been impacted by reduced or no in-person school or reduced daycare capacity. Plus, more than 37 million workers have an elevated Covid-19 health risk due to age or existing health concerns.
This affects all employees, not just core full-time staff. Contractors and contingent workers are not immune to the same household cost-to-benefit adjustments that the permanent workforce is facing.
Whether that’s changes in childcare, working conditions, or homeschooling, challenges we’re all facing might even be a greater burden on contingent and contract workers. Quit rates in heavily contingent industries reflect this added burden.
All employees have new concerns in the post-pandemic world. Not just on the job site, where PPE availability, temperature screening and contact tracing can make a difference to the overall value exchange. Employee concerns extend beyond your walls, with issues such as public transportation and its associated transmission risk now at the forefront of workers’ minds.
Just as each company must understand the specialized local market for their labor, knowing employee concerns on both a broad scale and an individual basis will help define the best retention strategies for your particular situation.
Learning the exact concerns of every employee can be a challenge. Mechanisms such as surveys or one-to-one meetings are potentially helpful but can also produce mixed results while straining staff availability. Consider leaning on your staffing partner for insight into employee concerns related to your specific market, and ask for guidance on retention strategies that have been working well.