4 Key Employee Retention Strategies in Uncertain Times
With fewer workers available, companies that focus on employee retention strategies have an edge. Here are four tips to compete for talent.
Employers who want to compete need to make employee retention strategies a priority. The Great Resignation was a pivotal moment in labor relations, making it more important than ever to retain employees and keep them productive. As Retail Week’s Mark Faithfull recently wrote: “As retail and hospitality get back to business, something seems to be missing: staff.” The British Chamber of Commerce says manufacturing firms must look for new ways to unlock existing talent pools by investing more in training their workforce, adopting more flexible working practices, and expanding the use of apprenticeships.
Inflation makes employees demand more
The rising cost of living is forcing many people to reassess their jobs. UK inflation hit a new 40-year high in June, making life even more difficult for those on lower wages. Nearly three-quarters (71%) of employees say their employer has not adequately kept up their pay with the cost of inflation, Visier research recently revealed.
In our survey of over 2000 UK employees, 1 in 20 respondents said they would quit their job in order to negotiate a pay rise or promotion. It’s a response significantly more common in men than women. It’s most common of all in the 16-24 group, where it rises to 1 in 10. At the same time, some 16% said they were planning to quit their jobs in the next 12 months if their employer didn’t offer them a higher salary. In addition, 43% said they planned on finding alternative ways of making money if their employer didn’t do more to support them.
This means a business risk for employers who haven’t given sufficient thought to employee retention strategies. In this pressurized and rapidly changing economic climate, one of the greatest threats to business growth is employee retention and recruitment.
Employers compete for limited talent pools
Alongside these complex problems, businesses are grappling to prove their ‘people first’ credentials. With vacancies outpacing the numbers of unemployed people for the first time since figures have been recorded, according to the Office for National Statistics (ONS), workers have more negotiating power. Here are four ways to improve staff retention.
1. Employee pulse surveys
Annual employee surveys have become inadequate in sense-checking how people feel about their jobs, the company that employs them, and the return on investment they receive from working there. Responsive employers turn to short, sharp, targeted employee pulse surveys to gauge real-time views on employee sentiment to spot flight risks before it’s too late.
For example, the economic benefits of allowing employees to work from home could be a key lever in employee retention. According to our data, 78% cite saving money on commuting costs as the overriding benefit, while almost half (47%) were glad they no longer had to buy lunch. Is this right for your organization? It’s time to ditch the guesswork on talent retention and follow some simple steps to keeping hold of your core workforce and top talent.
Pulse survey topics
Try engaging employees with regular employee pulse surveys on key deal breaker topics, integrated easily into their workflow, to check sentiment on:
Hybrid and flexible working: As remote, flexible, and hybrid work grows, connection becomes a HR superpower. HR leaders can use methods such as organizational network analysis to strengthen connections across the organization, as well as finding new ones. This is one way to stop people feeling isolated, which leads to built-up resentment.
Manager performance: Recent research by Visier found that two-fifths of UK employees have quit jobs because of bad managers. Legacy toxic management styles, combined with a lack of management training across the board, could be an underlying cause for staff resignation hotspots. Use people analytics to gain insights into problem hot spots. Wean out the people who are making your good folks leave.
Feelings of inclusion: Access to interesting work makes people feel included and invested in the organization. Amit Mohindra, Global Head of Talent Strategy and Analytics at Wayfair, agrees that, “Change happens if diverse people can make a difference and are listened to. Otherwise, they leave. Change is more likely when people of different backgrounds and persuasions feel included and heard.”
Ethical business: Are employees aligned to your corporate purpose? Do they know what it is? Engage them with regular dialogue on the issues that matter the most to you, and them. Evidence of operating responsibly, action on diversity, equity and inclusion promises (DEIB), supply chain transparency, anti-modern slavery policies, and meeting net-zero targets are all vital ongoing conversations.
2. Gain clarity on skills and training
Build a skills plan to create rewarding career paths and help match your people’s development to future business needs. Used the right way internally, skills data empowers both employees and companies to understand people’s value to the business in a much more transferable, nuanced, and realistic way than simply looking at job titles.
Increasing skills visibility in an internal marketplace grows opportunities for employees. It stops people from feeling like they are treading water, or not able to demonstrate their aptitude for other adjacent (or completely different) roles in the business.
Building individual skills profiles will also help you deliver data-driven reskilling strategies to plug gaps. Embracing reskilling and upskilling also helps offset the uncertainty created by changes in the labour market. It also adds to the menu of skills your business needs to meet the demands of the next phase of the digital age.
3. Remodel benefits and rewards
To understand the impact of your reward system—at all levels—you need a meaningful analysis of pay and other workforce data. You’ll need the full picture to answer questions such as: “Is your bonus system fair and reflective of people’s contributions to the business?”, “Is your annual appraisal process outdated?”, or “Does it inspire your people to give their best—or give them a reason to leave?”
A solution is unifying compensation data—salary, bonuses, benefits, compensation ratios—in a people analytics solution alongside workforce data, such as internal movement, performance, and engagement. This will also help you identify where your high performers are at risk of exit. It will help identify the correlation between pay and performance. And it will show how both impact productivity.
From there, you can overlay metrics to tie pay policies to business outcomes. This will help you retain your stars, cut turnover costs, and get the most out of your compensation strategies.
4. Know market trends in salaries and job functions
Be fully aware of how the market’s opportunities, roles, and compensation compare with those you offer. As Visier’s data scientist Hossein Ayouqi said in a recent Q&A session: “Visier has different benchmarks that allow companies to compare themselves and their performance against other companies that look like them.”
This will soon include compensation benchmarks based on the position of a person, tenure, gender and other categories. He adds: “Because the data can get very detailed, we can look at several different dimensions, making it easier to compare companies, positions, and compensation measures.”
Here’s how your organization can take proactive, data-driven action now, so that your workforce is ready for any economic cycle—and poised to come out stronger on the other side.
Interested in learning more about Visier? Get in touch with us for a demo!