Recovering from the Great Resignation – Practical Steps for Employers
Employers looking to put an end to the revolving door world of employee retention may need to expand their thinking a bit. The solutions are not one-size-fits-all, and the unfortunate reality is that the solutions seem to be marginally effective at best.
Don’t throw in the towel just yet! According to a recent study, the answer lies within.
Yes, employers should make an honest evaluation of their compensation practices and benefits programs; but, probably of even great importance, is to look at how the organization and leadership engage and communicate with the workforce. Please continue to our blog for a very insightful evaluation of the challenge and possible solutions.
Employers Exploring How to Go from ‘Great Resignation’ to ‘Great Recruitment’
Much has been said about the “Great Resignation,” the phenomenon of workers leaving without knowing when or if they’ll return to the workforce. Even though society has made progress adjusting to a new normal, many workers who left the workforce during the height of the COVID-19 pandemic still aren’t ready to return to business as usual. The soul searching that led workers to reevaluate their priorities and focus more on work-life balance continues keeping people out of the workforce. That’s a problem for employers struggling with a labor shortage. But employers don’t have to throw up their hands and give up. Instead, they can take steps to recover from the Great Resignation by embarking on a Great Recruitment of that pool of workers eager to work but just not in the same way they did before.
Why Employees Left
When the pandemic hit, many employers and employees alike pivoted to remote work. The transition was a relief to many but a burden for others. So much of a burden, many people chose to leave their employers so they could focus on childcare, elder care, their own well-being, or for other reasons.
Still others didn’t have the option of working remotely, and they left their jobs because they felt vulnerable to the virus by staying in the workplace. In the past, most people were hesitant to leave a job with no prospects for another one. But that has changed.
McKinsey & Company in March released results of a study showing why many people left without knowing when or if they would rejoin the workforce. Why did they feel they could do such a thing? “Because they can,” the researchers concluded, noting that a gap in a jobseeker’s résumé isn’t the black mark it once was.
The top three reasons people who were polled for the McKinsey study gave for leaving a job without having another one were uncaring leaders, unsustainable work performance expectations, and lack of career development and advancement potential.
How to Bring People Back
Just because people left doesn’t mean they don’t want to work. Of the almost 600 people surveyed for the report, 47% returned to work either in traditional or nontraditional arrangements.
Why did they choose to return? Workplace flexibility, adequate total compensation, sustainable work performance expectations, career development potential, and meaningful work were cited as the top reasons.
So, what are employers doing to lure people back? The McKinsey research says many are making mistakes. For example, some big-box retailers offer to pay workers daily instead of making them wait for a regular payday. Others are bumping up pay just to keep people even when productivity is lagging.
Those moves won’t work long-term, according to the report, which cited an example of a financial services company that increased salary ranges 15% but attrition stayed the same. The company boosted pay without also addressing worker concerns about unreasonable hours and high-pressure assignments.
No simple solution exists, the report says. “Companies will need to restructure compensation packages in ways that will attract and retain disillusioned employees. There is no one right way to do this; a lot depends on context, and some trial and error may be involved,” the report says.
In deciding what to do about compensation, the McKinsey researchers say employers should look at market rates and keep in mind the effects of pay transparency since offering new employees higher pay may lead to resentment among current employees who will demand raises.
In addition to revising compensation, employers can get creative with benefits to entice workers. “What if you subsidized cleaning services instead of gym memberships? Or what if you invested in on-site childcare services that would allow employees to eat lunch with their children?” the report says.
Finding Retention Success
Of course, attracting employees isn’t the only challenge. Getting them to stay also has to be considered. The McKinsey report says employers need to build “sticky” workplaces, where people will want to stay.
Including stay interviews, not just exit interviews, can help, according to the report, because listening to people in critical roles talk about how they are doing and what will keep them on board will help employers make decisions about scheduling and staffing.
Finding out what people need to do their jobs better can lead to innovative solutions. For example, creating new shifts or simplifying the application process can help recruitment and retention.
In competing for talent, employers need to look beyond pay, the report says. “Individuals may be looking for a certain range of pay when considering a job offer. But once that threshold has been met, cultural factors can make a company more attractive to join and, ideally, provide more incentive to stay. Focusing only on compensation or only on cultural factors won’t stem the tide of attrition. Business leaders must pay constant attention to both.”
Article courtesy of content partner BLR. Author, Tammy Binford writes and edits news alerts and newsletter articles on labor and employment law topics for BLR web and print publications.