In the throes of low labor force participation and high labor demand, the competition for talent is fierce. As it stands, it’s a jobseeker’s market.
2022 labor reports have shown that the Great Resignation shows no signs of slowing down. With high inflation, wages that can’t keep up with increasing rates, and some companies’ reluctance to offer flexible accommodations, workers refuse to settle for roles that fail to meet their evolving needs. As a result, there are significant wage discrepancies to note between those who leave their jobs and those who choose to stay. Overall, this data signals further need for organizations to establish clear retention strategies in order to sustain a strong workforce.
Job Switchers vs. Job Stayers
As the name suggests, job-switchers are those who leave their roles in search of other career opportunities, while job-stayers are those who remain at their current place of employment. Because 2022 has seen a spike in the number of people leaving their jobs for new positions, reports show a significant difference in wage growth between switchers and stayers.
A survey released by The Conference Board revealed that “nearly a third of workers who left their jobs during the pandemic are making 30 percent more in their new roles.” For employers, there’s a race not only to reach individuals looking for work but also to offer competitive pay and employee benefits. Not to mention, as inflation rates reach record highs, employers are having to develop more creative ways to entice workers to stay.
The Overarching Effects of Inflation
To address the current inflation rate of 8.8%—an increase not seen since December 1981—some companies are offering inflation-adjusted raises to their employees. Even with these apparent pay increases, the amount is still not keeping pace with inflation in some cases.
High inflation rates have major implications that trickle down and affect many aspects of everyday life. For example, the childcare industry increased pricing to keep up with inflation rates, meaning those who rely on these services will have to pay more. If these workers are not receiving appropriate pay increases, they’re now going to find it more difficult to make ends meet.
In terms of inflation expectations, experts claim rates will decrease from the current rate of 8.8% to 2% by the end of 2023. Even so, there are more ways for companies to ensure they are meeting worker needs beyond a reliable paycheck. While offering raises is one step toward retaining talent, studies show better pay isn’t the only thing swaying workers.
Retention Is a Company Responsibility
Modern workers are not only looking at pay, benefits, and number of paid-time-off (PTO) days when weighing career options but also factoring in flexibility, retirement plans, company culture, and job growth opportunities. That said, the efforts don’t stop once they’ve accepted the offer.
Here are some ways organizations can become proactive in their retention efforts:
- Training programs for new hires and existing employees
- Diversity, equity, and inclusion (DE&I) initiatives
- Career growth opportunities
- Performance feedback
- Employee mentorship programs
- Employee resource groups
- Flexible workplace accommodations (remote and hybrid options)
- Providing required assets (laptops, monitors and headsets, etc.)
Onboarding takes at least 3 months, but in many cases, it extends beyond this time frame. In fact, experts say the onboarding process can last a full year. The bottom line is, supporting employees is a constant effort and often evolves over time, which means organizations must have retention strategies in place if they aim to keep their workers for the long haul.
A Managed Solutions Partner Could Be the Missing Piece
To drive home the importance of retention strategies, the Society for Human Resource Management reports that “companies spend between one-half and two times employees’ annual salaries to replace them.” Working with a managed solutions partner that understands business operations means you can maintain oversight of core operations while it fills potential retention gaps and ultimately saves you money. Whether it’s supplying the talent and assets needed to get the job done, managing the onboarding and offboarding process, or offering consultative business advice, a managed solutions provider is well equipped to support any retention efforts. Beyond operational logistics, managed solutions teams help support career development, mentorship programs, and training initiatives, even when handling remote or hybrid workforces.
Not only can a managed solutions partner assess your attrition issues and implement retention strategies to entice your workers to stay, but it can also help you attract those job-switchers who are keeping an eye out for better opportunities. Not to mention, by supplying contingent workers who can flex with low and high demand, this partnership can also help companies become more proactive as concerns about a looming U.S. recession are discussed.
When employees feel valued and included and are given plenty of opportunities to grow both personally and professionally, they are more likely to stay with their current organization—a win for all involved.
Nicholas Ault is a Market Research Analyst at Aston Carter.