You’ve seen the headlines: Employees are jumping ship for new opportunities. Throughout 2021, more than 3.9 million workers quit their jobs each month on average — the highest resignation rate on record.
Employee turnover comes at a hefty price tag. Replacing one employee can cost between one-half to two times the employee’s annual salary, according to research from Gallup. And that doesn’t account for lost productivity. An open position takes an average of 42 days to fill, according to The Society of Human Resource Management (SHRM). Meanwhile, a new employee takes 8 months to become fully productive on the job.
The solution, of course, is re-recruiting your workforce — before you find yourself in a lurch.
So, what is re-recruiting? Savvy HR execs take all the tactics they deploy to entice new employees and use them to retain (or re-recruit) in-house talent. The idea is to treat existing staff as well as you would a valuable job candidate — enticing them with top-notch pay, benefits and vacation options.
Here are eight tactics you can use to retain your workforce and avoid attrition.
1. Re-think Your Approach to Compensation
Since 2011, pay gains from moving to a new job have outpaced pay increases from staying at one company — and the gap is widening. Job hoppers saw wage gains of 4.3%, as of September 2021, while loyal employees saw an increase of 3.2%. Additional compensation is in order to keep the best members of your staff.
Apple surprised its high performers at the end of 2021 with out-of-cycle bonuses, reported Bloomberg, to stave off deflections to competitors like Meta. Issued as restricted stock units, bonuses ranged from $50,000 to as much as $180,000.
Another IT professional at a New York City company returned from vacation to learn that her salary had been bumped up by 20%. Yes, she was valued for her good work, but it didn’t hurt that the company had recently lost five of her IT colleagues to resignations.
Be sure to keep inflation in mind when setting salaries. While the U.S. labor market saw the fastest wage growth in 20 years, inflation has crept up to 7%. Today, a 4% raise may actually feel like a pay cut when it comes to purchasing power. Consider, instead, a wage increase of 1 to 2% above inflation, suggests Harvard Business Review.
2. It’s Time to Close Wage Gaps
“During the great resignation, I’m aware of companies that have provided underpaid workers with a higher job title and a salary increase to retain valued employees, often before employees have asked for the title increase or raise,” said career coach Lisa Hennig.
That’s especially true for employees from underrepresented groups. Companies have listed DEI among their 2022 top priorities. Wages and retention strategies should reflect this dedication to equity. If racial minority and female employees are underpaid compared with white male counterparts, now’s the time to close the gap. Fail to do so, and you risk losing diverse talent to your competitors.
Retaining underrepresented employees improves employee retention overall. According to 2017 research from Deloitte, 39% of employees said they would leave their current employer for one that’s more inclusive.
3. Renew Your Company’s Mission
Salary isn’t always a deal-breaker. Some employees prefer working for purpose-driven enterprises that align with their values. Research from Deloitte found that “mission-driven” companies have 40% higher levels of retention compared to other organizations in their market segment.
Have employees shape your mission statement, by gathering feedback in one-on-one meetings, during town halls or through email. Consider offering anonymous ways for workers to respond to increase candor.
“Every company I know is taking input on…[how to spend] money on ESG-type things…[like] sustainability and DEI initiatives, or how it directs its philanthropic funding,” says Sally Blount, a professor at Northwestern University’s Kellogg School of Management.
Roll out your updated company mission — or reiterate your current vision — each year. Be sure to explain how the company model impacts each team member’s specific job.
4. Create a Clear Path Up the Ladder
Employees are more likely to stay with your company if they can envision their future at the organization. Make the path to a promotion clear.
“Start talking about what the next job [for an employee] looks like,” said Julia Dhar, managing director and partner at consultancy Boston Consulting Group. For example, on a factory line, an employee’s “first day is a very reasonable day to start talking about what it would take to become a shift supervisor.”
This also holds true in the knowledge sector. Logistics company Loadsmart has an online portal known as CLEAR, which states the next title for an employee, what they need to do for a promotion and how their compensation will scale.
There’s also a marketing element to upward mobility: Dhar suggests that companies highlight role models who may have started at the bottom rung and ended up in a prominent position. “[Those examples] open people’s eyes to what is possible,” she says.
Senior Executive DEI Think Tank is a criteria-based membership community for chief diversity officers and senior-level DEI leaders at large organizations to share difference-making tactics, trade valuable resources, and seek the counsel of experienced peers in a private, confidential setting.
Do you qualify?5. Invest in Professional Development
In addition to promotions, professional development signals that your company values employee growth. In a June 2021 survey of 20,000 LinkedIn users, 59% said the best way to improve culture is through professional development.
Meet each employee to discuss what makes them tick and how they want to advance throughout their career. Then find professional development opportunities that help your team members achieve their goals — all while building company loyalty.
See how companies are prioritizing professional development.
- Managers at Availity, a healthcare IT company, create individual development plans (IDP) with employees to identify their interests and match them with training opportunities, according to chief human resources officer Jessica Micciche. “Internal growth is very important to us, we recently promoted over 50 associates from our call center into other roles in the company,” she says. “Managers love those team members for their wealth of customer and company knowledge.”
- Strata Oncology has different apprenticeship programs to help employees develop new technical skills to aid in their career growth.
- Logistics company Shipwell pays for its managers’ membership to GoCoach, a service which offers exclusive training and mentorship programs.
6. Acknowledgement Matters
A little recognition can go a long way. Research from SHRM found 68% of HR professionals agreed that employee recognition had a positive impact on retention.
Recognition can be as simple as a “thank you.” At healthcare platform BrightInsight, CEO and co-founder Kal Patel says employees regularly receive shout-outs on Slack and during Zoom meetings. All employees have access to BrightInsight-branded cards if they prefer to send a timeless, classy display of thanks.
Other recognition programs are backed by budget. Availity’s Achievers program allows peers and higher-ups to bestow public kudos, which translates into “L.o.v.e. (living our values everyday) Points” that can be exchanged to buy gifts. SHRM recommends that organizations invest 1% of payroll in recognition.
7. Refresh Your Benefits Package
Top employers go beyond covering medical, dental and vision. During the pandemic, companies have launched benefits to meet new employee needs — such as child care and remote work perks. Survey the HR landscape for your industry. If competitors are covering internet costs, subsidizing coffee orders or offering remote workout courses, it’s time to upgrade.
Think about your employee demographics — from age to race to gender. Your benefits buffet should have offerings to support them all. For example, health benefits should be inclusive of your transgender employees. A vacation calendar that lines up with school holidays can be a big win for parents.
8. Make Work Schedules Flexible
In these days of remote working, many employees expect flexibility. That means the ability to work from anywhere — whether that be at home, at a coffee shop or in an office space. Biopharmaceutical company Sage Therapeutics shifted to a flexible working model this year, downsizing and re-imaging office space for those who choose to work in person. That includes a section with treadmill desks, café space and a library zone for quiet work.
Flexible hours also allow employees to customize their schedules. That can mean allowing one employee to work four, 10-hour days, while another takes Tuesdays off to assist with eldercare and works on Saturdays instead.
Does your organization have a retention strategy? Email editor@seniorexecutive.com to share.
