Today’s economic climate is ideal for job seekers. Job numbers are steadily increasing, and our economy has returned to the elusive condition called “full employment.”
Emboldened by those numbers, many employees are confident they can quit their job and quickly land a new one with a bigger paycheck and better benefits. In this tight labor market, where there are more job openings than candidates, the typical balance of power during the hiring process has been reversed.
Instead of workers competing for a limited number of jobs, employers must vie for a shrinking number of candidates.
That means positions take more time to fill, which impacts workflow and workload for your remaining employees. Plus, it can mean additional costs to employers. A recent survey from SunTrust found that more than 40 percent of employers have increased wages and/or benefits to attract and retain talent.
Even in a favorable labor market, employee turnover can cost an organization anywhere from 16 to 213 percent of the lost employee’s salary, according to a report from the Center for American Progress.
If you want to avoid the high cost of turnover in a tight labor market, the following employee retention strategies should be top of mind.
Create a company culture in which employees feel valued.
We spend a large portion of our adult lives at work. When you provide an environment that shows employees their work is valued and feedback is welcomed, staffers tend to be more engaged and less likely to leave for new opportunities.
Recognizing accomplishments is a tried-and-true method of showing people that their work matters. Whether you offer additional compensation, private congratulations, or public praise (via a company message board or a team meeting), companies should routinely recognize standout employees or teams — as a way to reward those receiving praise and to demonstrate that exceptional work will be recognized. This is critical, given that a 2019 Staples survey found 68 percent of employees would consider leaving a job where they didn’t feel supported by management.
Effective managers also use everyday interactions to tell their employees that their efforts are essential. If you assign a new project, you can explain why a particular employee was chosen.
For example, “Your flawless presentation to the board last month helped us secure the funding for Project X, so we’ve decided to have you lead the meeting for Project Y next month.” Including the praise shows your employees that their contributions are worthwhile, and it can help you explain an increase in responsibility.
Meeting with employees on a regular basis for check-ins and updates also enables you to understand what is working for them and what is not. Don’t wait until an employee is leaving to find out if or why they are not happy.
Invest in professional growth and recruit from within.
A large portion of employee retention is setting clear expectations for their work – and giving them the resources, training, and tools to succeed. Ideally, this process starts with new hire orientation and continues as long as the employee stays with the organization. When employees stagnate in their positions, they often look elsewhere for opportunities to grow.
When you invest in ongoing training and education for employees, it can help you retain talent and institutional knowledge. From day one, ask employees what their career goals are and find ways to support them. Not only does the employee feel valued, this also helps prepare them for advancement later on in their careers.
It’s important for companies looking to attract top talent to encourage managers to focus on coaching and career management. If your top performers don’t see a clear path to advancement, they may look to the competition for their next opportunity.