Companies are unable to fill millions of job openings while employees are quitting their jobs in record numbers. This is unprecedented and is called the “Great Resignation.” Resignations peaked in April 2021 when a record 4 million Americans quit their jobs and this number has remained abnormally high. Surveys indicate 1 in 2 employees are considering changing careers.
Employees have found power in their voices and resignations. They decide where they want to work and when they want to work. They are searching for companies with a mission and purpose that align with their values and that offer flexibility, listen to their voice, and care about them.
Compensation is important and so is PTO, flexibility, job satisfaction, and great leadership. Since January 2020, we are experiencing compensation increases of twenty percent (20%) or more. This increase is driven by the need to attract and hire top performers. It is also caused by companies recognizing the value of their key leaders, preemptive measures to thwart competitor raids of their key people, and avoiding the need to counter-offer resignations.
As a leader, have you kept up with the changing needs of the workforce? This is a wake-up call and you have to address the current times or watch your employees exit.
Have you created an environment that promotes retention? The underlying cause can range from embracing working remote, low pay/long hours, no flexibility, poor corporate culture. These are no longer passive and frivolous topics; these are real factors for individuals making tough employment decisions. These factors can be so important, a potential hire may be willing to settle for less compensation to have one or more of them.
Leaders can frame hiring and retention in terms of competitive advantage instead of reserving that analysis for products and services. The following are some suggestions to improve your competitive advantage for hiring and retaining great people:
Retention Incentives Compensation/Addressing Inequities: How do you think your employees feel when they are not paid what they are worth until they interview elsewhere, turn in their notice and then receive your counteroffer? An employee who is well compensated will not leave because of money. Addressing these inequities between what you pay and what the market is paying with increased compensation, bonuses, and long-term retention incentives promotes loyalty and stability. These compensation plans can help with retention for the entire workforce and not just executives.
Be Flexible to Accommodate Different Work Styles: Embrace flexibility in terms of place, time, job description, and career path. Employers have learned that employees thrive in remote work models. Employees working remotely are more productive, tend to log on earlier, and remain at their computers longer since they have no commute. Work schedules can be personalized to fit the employer’s needs and the employee’s life such as working on-site, remote or hybrid.
Invest in Professional Development and Growth Opportunities: An employee offered an established growth plan and career track is more likely to accept the job offer and remain with the company. To retain your employee, learn their goals, individualize training/ coaching to support their development and provide opportunities for advancement. Imagine how much you could learn about your workforce if you asked each employee to describe their dream job?
Improve Corporate Culture and Management Relationships: An organization with a positive, transparent, and respectful culture, great managers and a purpose other than the bottom line is more likely to attract and retain top performers. The current workforce has a strong desire to feel a sense of connection, purpose, and alignment with the organization. We have all heard that people don’t leave companies, they leave their boss. All management, including the CEO, should be accountable for resignations and consider whether they should retool to become the manager that every employee wants to work with. Stop focusing solely on profits and find ways to connect employees to a great culture, great managers, and a purpose
Genuine Care for Employees: We can have up to 5 generations in our workforce. This means that leveraging age diversity can be a competitive advantage. Promote opportunities to demonstrate genuine care for employees such as creating community, building teams, and a sense of belonging. Promote innovation and acknowledge contributions and personal sacrifice. Assist all employees equitably with significant costs such as student loans or child care ensuring that employees without these burdens receive their fair share.
The Great Resignation is an opportunity to develop competitive advantages to create an organization that will attract and retain top talent now and in the future.