Updated: Sep 30, 2022
Attracting and retaining talent is the bane of businesses today as employees are calling it quits en masse since early 2021. Many industries are facing a severe shortage of skilled workers ever since The Great Resignation.
And the cost of high turnover rates is not to be overlooked. Now more than ever, organizations cannot afford to lose talent during the current economic downfall. The question is, how can employers attract talent, retain them, and keep them happy for the long run?
Six Reasons Why Employees Are Calling It Quits
Mercer conducted a Hiring and Retention Survey on over 150 Singaporean companies (1). Almost 70% of the respondents reported an increase in turnover in 2021 versus the same period last year. And this trend seems to be holding onto its reigns in 2022.
We need to find out why people are pulling the plug. And this recent Gallup study points out six key factors that are driving employees to quit their jobs or choose new employers (2).
1) Poor compensation
The 2022 PwC Financial Wellness survey showed that 72% of employees report being stressed about their finances (3). That said, financial concerns are one of the biggest reasons why people pivot to other companies or pursue more profitable opportunities.
2) Burnout and stress
Many workplace studies in the past year emphasize just how burned out and stressed the workforce is at large. Even for those who aren't experiencing burnout, the increase in remote work has raised awareness about the value of life outside of work.
3) Lack of fulfillment
Many workplaces fail to outline realistic job expectations. This creates a mismatch between employers' and employees' ideas of what people are expected to do. And workers who don’t get to use their strengths and grow their skills will likely seek jobs where they can.
4) Job insecurity
Uncertainties about our health, economy, and career throughout the pandemic have pushed people onto the lookout for jobs that provide greater stability. Moreover, what security means has likely changed for many industries since the start of the pandemic.
5) Inconsistent policies
Data regarding employee vaccinations suggest that employees have strong feelings about the issue. Results also show that 4 out of 10 employees see health and safety policies as a significant factor when being recruited.
6) Lack of diversity and inclusivity
Employees today view equitable and inclusive workplaces as a sign of societal and organizational progress. More than ever, workers are demanding substantial and proactive change on these issues.
What Should Organizations do to Attract and Retain Employees?
The current labor shortages and turnover trends can be frustrating. But to thrive in our dynamic work landscape, employers should use this opportunity to improvise on outdated management and recruiting models.
And here are a few ways leaders can champion the connection between employee needs, recruitment, and retention.
1) Focus on holistic well-being solutions
Many employees are still recovering from intense slumps in health, finances, and work performance as a result of the pandemic.
That’s why organizations need to approach benefit packages holistically by taking into account mental, physical, and financial wellness. The goal is to create an all-rounded benefits package that meets the needs of all segments of workers. Employers should also guide people on how to easily access these benefits by clearly communicating them to current and prospective employees.
2) Compensate fairly
The 2022 LinkedIn Global Talent Trends Report found that companies renowned for providing fair compensation had a 56% lower rate of attrition (4).
Companies must pay their employees equitably and adjust salaries regularly. This may look like raises or promotions. Even if your business can’t raise wages now, consider other forms of compensation like bonuses or enhancing benefits.
3) Facilitate professional growth
When organizations hold people back from honing their strengths or don’t provide growth opportunities, people are bound to retreat. The aforementioned Linkedin Report also revealed that 9 out of 10 employees are willing to stay if their company invested in professional growth.
More so, our future of work requires us to rapidly adapt and continuously upskill. Therefore, leaders need to prioritize their teams’ career growth. Companies may reimburse courses, sign them up for conferences, create mentorship programs, and invest in tech. These strategies help people acquire new competencies as business requirements evolve.
4) Champion inclusive and rewarding cultures
Organizational values and cultures play a huge role in employee satisfaction and psychological safety. An analysis by McKinsey & Co demonstrates how workplaces that prioritize inclusivity attract and retain skilled employees more easily (5).
That said, change leaders can nurture healthy company cultures by:
committing to diversity and inclusion practices
providing flexible work arrangements
giving regular feedback
destigmatizing mental illness
rewarding people for their efforts
With effective and compassionate management, leaders can minimize reasons to leave or help people feel valued even if they do. Ultimately, when people feel appreciated within the company and beyond, organizations are in a much better position to retain and attract the best talent.
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