Learning & Development, Talent

Is Cost of Living Hurting Your Chances at Retaining Top Talent?

High property taxes, student loan debt, and stagnant wages are causing many workers to be more selective in where they live and work. Because of this, many employers are missing out on top talent as more workers are choosing quality of life over working for big name brands in expensive cities.

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A new report, “From dwelling to desk: a survey exploring how American workers weigh commutes, living and working spaces”—released by Randstad US and Apartment Guide—explores how the rising cost of living is influencing where and how people live and work in the United States, and the findings show that these rising costs are really impacting workers across the nation.

The survey found that younger workers were particularly affected. For example, 50% of Gen Z employees say they have more than one job to supplement their salary, compared to just 28% of workers of all ages. And as a result, more workers are choosing to get a second job or side gig to supplement their income, as well as to seek out roommates to help cover additional household expenses.

“Tight budgets are nothing new for young people just starting out in their careers, but today’s increasingly high cost of living coupled with slow wage growth means that, despite low unemployment, millennials and Gen Zs are faced with at least two variables negatively impacting their financial well-being,” says Jim Link, Chief Human Resources Officer, Randstad North America.

Living Expenses Outpace Pay Increases

According to the findings, almost half (44%) of respondents say their annual residential expenses (like rent or a mortgage) increase more than their salary does each year. This increases to 53% for Gen Z workers.

Additionally, 42% of workers say they must earn at least $61,000 annually in order to live in their desired neighborhoods, while 31% say they would need to earn at least $100,000 or more. Almost 40% of all renters say they need a roommate because they claim the cost of their home is too high for the income they make. And 21% say they need more than one roommate to afford their current rent.

Long Commutes Impact Mental Health

When you hear of Silicon Valley, tech giants come to mind, but also the high cost of living. In order to live cost effectively, many workers must move out of the major cities, which now results in a longer, more stressful commute. And Silicon Valley is just one example; major cities across the nation are becoming even more difficult to afford.

According to the findings, 24% of all workers surveyed say they live far from their jobs because they can’t afford to live nearby; that number jumps to 43% for Gen Z workers. Living farther away from the office results in longer commutes for many employees, and this is having an impact on their mental health. And 27% of respondents say their commute negatively impacts their mood. This number nearly doubles for Gen Z workers (42%).

Can Flexible Work Arrangements Help?

You may be thinking, “What about telecommuting options? Can’t this help ease the burden?” According to the report: “Perhaps not. While the majority of workers want flexibility, many of those surveyed admit to distractions and difficulty disconnecting when working from home.”

“Working from home can offset some of their transportation and living expenses, but it can also lead to loneliness and increased risk of disengagement,” says Link. “It doesn’t have to, though. Managers with remote workers can take steps to promote as much collaboration and face time as possible with teammates to combat isolation.”

Flexible Work CAN Work with Proper Training

While isolation and the inability to disconnect are valid reasons as to why workers do not want to work from home, HR professionals and managers can help ease these concerns by offering employees training on how to telecommute. Here are a few things you’ll want to do when training your employees on how to work remotely.

Start slow. Unless it’s necessary, don’t allow your employees to go from never working remotely to suddenly working 5 days a week—remote full-time—within a week or less. Instead, let them work 1 day a week from home for a month or so, and then slowly work toward allowing them to work remotely full-time, if that’s what they wish and what ensures their highest levels of productivity.

Establish and agree on a policy. Don’t ever allow your employees to guess what’s expected of them and when it’s expected of them, especially if they’re working from different locations and are not familiar with working remotely.

Establish a policy for remote workers that outlines their required work hours (even if they set those hours themselves), how they’re going to report to their managers and stay connected to their teams, their weekly meeting requirements, etc. And then have them sign the policy document and officially agree to those terms so that expectations are firmly discussed and agreed upon by all parties.

Offer technology training. Some workers will need to be trained in how to use certain platforms, software, and apps before they’re able to be productive working remotely. So, make sure each employee is very well acquainted with the technology he or she will be required to use, and that it’s properly downloaded and installed on the employee’s devices, before he or she begins working remotely.

Provide guidance in time management. More responsibility is placed on employees who work remotely. No one will be telling them when to complete a task or where. And it’s a lot easier for them to get distracted by everyday personal responsibilities, too.

So, train all remote workers how to manage their time effectively so that they can discover when they’re most productive, what tasks are higher priorities, how to juggle calendars and work schedules and meetings, etc.

Encourage effective communication skills and practices. Effective communication is already challenging when every team member is in the same room together, and it becomes even harder when each team member is working from a different physical location or time zone.

Be sure that your remote workers are well versed in effective communication skills and remain collaborative and engaged with their remote teams. Otherwise, productivity levels will decrease, along with remote workers’ satisfaction levels.

While employers can’t control the cost of living, they can help their staff save some cash by offering work from home arrangements that reduce long commutes or living in expensive locations. However, these working arrangements are only effective with proper training, so be sure to keep the tips, mentioned above, in mind when implementing telecommuting arrangements in your workplace.