6 Strategies to Boost Retention Through the Great Resignation
With employees jumping ship in record numbers in the United States, companies are facing a talent crunch. One HR strategy they should embrace is to make themselves so attractive that employees won’t want to leave. These six measures can help accomplish that: (1) add monetary incentives for staying, (2) provide better career opportunities, (3) elevate the company’s purpose, (4) prioritize culture and connection, (5) take better care of employees and their families, and (6) embrace flexibility.
There is a widening mismatch between the job environment employees want — and now expect — and the one their organizations have. That’s the finding of conversations we’ve had with top executives of dozens of companies over the last several months, multiple global surveys we’ve conducted to learn what employees want, and our examination of 20 years of data on the expectations and workplace satisfaction of 800,000 employees from a wide range of industries and job categories.
This may explain why so many workers have been quitting their jobs and why companies are having trouble filling the millions of current openings across the U.S. economy. It also may hint at an immediate, though partial, remedy to the talent squeeze: reduce employee attrition by making your company a more attractive place to stay. In this article, we offer six ways to do so.
How bad is it?
The challenge is severe. Some of our clients have told us they’re seeing upwards of 30% attrition in certain job categories. Some industrial clients have told us that some of their plants have had more than 100% employee turnover since March 2020. In other segments, especially technology and data science, employers describe the turnover and churn as “unrelenting.” At the end of the day, they say, there are always empty chairs. Data from the Federal Reserve Bank of St. Louis, showing steady and significant increases in voluntary “quits” during the pandemic in a wide range of sectors, seems to confirm the anecdotal reports.
The current turmoil in the labor market isn’t likely to subside any time soon. Indeed, 57% of the respondents to our latest survey of more than 10,000 knowledge workers across the globe, conducted in partnership with Future Forum, said they’d consider taking a new job in the coming year.
What’s the solution?
Employers need to recognize that it takes significantly longer to recruit someone than it does for them to give their two-week notice and depart. The solution, then, is to immediately bolster retention while ramping up recruiting. To do so, companies need to get on the same page with employees by reconceptualizing what it means to be part of their organization.
We have some 800,000 data points collected over 20 years telling us what people value at work. The responses, from both white- and blue-collar workers in a wide variety of industries, fall into four broad categories: value, purpose, certainty, and belonging.
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All four apply to both the retention of existing employees and the recruitment of new prospects. But recruitment and training costs and the time it typically takes for new hires to reach the same level of expertise as the people they replaced make it imperative that employers focus immediately on retention.
How? Based on our research, we believe taking the following six measures can have the greatest impact:
1. Incentivize loyalty
You have to pay people enough to take the issue of money off the table. So, in addition to updating your overall compensation package, consider offering employees one-time bonuses, helping them pay down their student loans, and providing them with work-from-home stipends. An added benefit of re-leveling compensation is that it gives you an opportunity to detect and correct pay inequities for people of color and women, including mothers of young children. We are also seeing some companies offering “boomerangs,” which are bringing back people who have recently departed by offering to immediately vest them in long-term compensation plans.
2. Provide opportunities to grow
Pretend your best people just handed in their resignation notices. How would you change their minds? Ask them, “If you could shape your dream job here what would it be?” Then look for ways to make it happen. Forward-thinking organizations have been doing retention interviews for the past months — asking each employee what it would take for them to stay.
In forthcoming BCG research based on employee-engagement-survey data we found that a significant predictor of whether employees are engaged is how enthusiastically they answer the question, “Does my job make good use of my skills?” In short, show current employees that you value them even more than potential new hires by providing them with new opportunities to grow and advance. Workers are hungry for this vote of confidence. Our survey data shows that 68% of workers around the world — blue- and white-collar alike — are willing to retrain and learn new skills.
3. Elevate your purpose
Purpose is the timeless reason that your organization exists. It’s the reason people join and choose to stay. Our analysis shows that in turbulent times a belief in what an organization is trying to achieve is even more important than in quieter periods. Prove to employees that there’s more to your organization than the bottom line. And don’t just talk purpose; use it to shape what you do and how you do it.
4. Prioritize culture and connection
Put your work aside and make time to connect and build relationships with — and among — your people. Not only will this solidify their relationship with your organization, but our research during the Covid-19 pandemic indicates that social connection also has a significant positive impact on productivity. Our Covid-era survey data show that both blue- and white-collar workers around the world place a higher priority on having a “good relationship with coworkers” than on many other job attributes.
5. Invest in taking care of your employees and their families
Provide mental health resources, acknowledge the personal sacrifices everyone has made during the pandemic, help parents with small children by providing or subsidizing day care, and give more paid time off. Sure, some employees will need more than others. So? Do whatever is required to take care of them.
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6. Embrace flexibility
The future of work is going to be providing flexible work environments in terms of place, time, job description, and career paths. Embrace it. Better yet, have employees form teams to create their future of work. If people help build their dream home, they’ll want to live in it.
And speaking of flexibility: loosen up on “qualifications.” Consider hiring candidates who don’t quite fit your profile; if they have 75% of what you’re looking for, grab them. More than half of technology giant IBM’s U.S. job openings do not require a four-year college degree. With the right mindset and support, people who come up a bit short on paper can learn what’s missing.
We don’t have to resign ourselves to the empty chairs and a continuing tide of resignations. Decisive action is what’s needed, and it’s needed now.