If you own or manage a company or firm, you don’t need us to tell you recruiting and retaining employees presents an ongoing challenge. January 2018 marked the fourth month of historically low unemployment rates in the United States, which is generally great news for your business and its place in the economy. At the same time, the tight labor market means employees feel more empowered to make changes in their working lives. To underscore the point, 47% of human resource professionals cited employee retention as their top concern in 2018, with recruitment coming in second. In the current labor market, we all have more spaces to fill and fewer candidates to fill those spaces.
Going beyond the time and resources even a highly qualified new hire needs for training and acclimation to company routines and culture, loss of personnel can create a vicious cycle in an organization. An experienced employee leaves, which means other employees find themselves picking up the slack during the search process, which can lead to dissatisfaction, which leads to those remaining employees looking elsewhere. A tight labor market exacerbates this issue because the hiring process may take longer, so the best strategy is to keep turnover as low as possible.
Tangible Compensation
Salary and benefits are commonly cited as the primary motivation behind a job change, so the value of competitive pay can’t be understated. If low turnover starts with hiring the right candidate, it’s also important to make salary and benefits fully transparent from the recruiting process out. A recent Glassdoor survey found less than 10% of online job listings discussed compensation in the job description, even though 98% of job seekers and employees said they would find such information helpful.
Long-term employees don’t want to see their compensation stagnate, so raises, bonuses, and/or a defined pay scale are essential. Transparency in the process of determining salary increases is also vital.
Intangible Compensation
At some point in our lives, most of us have had a job that no amount of compensation would have persuaded us to keep). The factors that influence morale tend to be manageable within a good employee retention strategy. If employees are stressed and overworked, we can look to stress management or flexible scheduling strategies. If they’re frustrated by inefficient workflow processes, we can automate or outsource tasks. Coaching and mentoring, along with meaningful education and training opportunities provide clear means for advancement. We can take initiative to make our working environments more positive.
Some companies are also combining their efforts to promote employee satisfaction and well-being with their compensation packages. These companies are aligning benefits to employees’ specific needs and company values, using data analysis, and these practices are producing positive results. These benefits packages may go beyond standard medical and dental to include programs to address employee well-being and financial education. While these personalized and expanded employee benefits have monetary value for employees, they also carry an important message: “You matter to the company.” That message alone is one of the most powerful forms of compensation at our disposal as our organizations work to reduce turnover.