The labor shortage is one of the three most significant challenges to businesses today. One way to attract new workers is to be sure you create a workplace attractive enough to keep your current employees.
It’s safe to say that many readers of this column need more employees. According to the jobs site Indeed, this month, the number of U.S. job openings reached 11.2 million. An Indeed search for openings posted in the last 14 days, within 25 miles of Pittsfield, yielded 1,198 jobs.
A tight labor market was an issue before the pandemic. On April 15, 2019, I co-chaired a roundtable with the Associated Industries of Massachusetts called "Finders Keepers: Hiring and Keeping Employees." It remains relevant today; you can watch it at tinyurl.com/3dru34hp.
Employers are not going to be able to attract workers unless our houses are in order. We need to understand why the 7.4 million people in the U.S. are without jobs and why 4.4 million workers quit work in September 2021.
According to Future Forum’s study “The Great Executive-Employee Disconnect,” 57 percent of respondents said they’d consider taking a new job in the next year. According to Mercer’s 2021 “Inside Employee’s Minds” study, 23 percent of people earning more than $60,000 said they were “seriously considering leaving” their company. Supervisors, managers and executives are seriously considering resigning at rates of 31 percent, 24 percent and 15 percent, respectively. It’s not just low-wage, entry-level workers who are at risk of quitting.
The amount you pay your employees is part of the equation; you must ensure they don’t have economic stress. However, keeping (and finding) employees isn’t just about wages. It would benefit employers to consider the unmet needs of their workforce.
According to the Mercer survey, physical health ranked as the top unmet need. The survey examined 16 concerns and found that other top unmet needs were work/life balance, mental health, personal fulfillment and purpose, and being able to retire. Digging deeper, different segments of the workforce (pay scale, nationalities, age ranges) have other priorities.
Strategies used to retain employees will lead to better talent acquisition. I advise a combination of immediate tactics and long-term solutions.
Driving down West Housatonic Street in Pittsfield, I passed a sandwich board in front of a company offering starting pay at $12 per hour. Thirty seconds later, I passed another company and another sandwich board offering $12.50. You may doubt that people would leave one company for another for 50 cents an hour. But, according to Zippia, in 2021 the average wage growth when switching jobs is 5.8 percent. The average salary increase is 14.8 percent.
If your business wants to retain employees, it should make pay a nonfactor. That can be accomplished by addressing those unmet needs. Or you can do it more immediately by finding a way to pay more — even if the pay is a future promise.
Increasing pay now may not be a viable option for your company. Tell your employees this: They’ll respect the transparency. And it will lessen their resentment if you entice new hires with more pay or sign-on bonuses. For current employees, you could strike a profit-sharing or goals-based bonus to be paid in 12 months, so long as those defined goals are achieved.
Other immediate actions are to inform of a future match to the 401(k) or company retirement plan. The business could offer to pay down student debt after workers have been employed for two years. It could offer referral bonuses for introducing new employees.
At least half of that bonus should be paid upfront; the rest paid so long as both are employed six months later. Instead of increasing pay, other options are to pay for tuition and continuing education that sharpens the skills valuable to the company.
Threat of losing older workers
The biggest threat to losing your employees ages 55 to 64 is fear of running out of money in retirement.
Fifty-six percent say that their top reason for leaving is to find an employer who will better prepare them for retirement. Of that age group, 49 percent say they would consider leaving because of insufficient pay or benefits. Others cite a demanding workload and their relationship with their boss.
For employees ages 55 to 64, you could hire a certified financial planner to guide key employees through their working years into a successful retirement. Some money management firms offer Social Security and Medicare filing and a plan to maximize benefits. Your company could provide that to employees who remain on the payroll until a determined retirement age.
Jane, from Northampton, runs a graphic design company for furniture manufacturers. Jane was able to get an extra year of effort from a high-level employee, Margie. Jane allowed Margie to stay part time to mentor and transfer knowledge to other employees while allowing Jane to phase into retirement.
Some money management firms provide college funding solutions, potentially saving your employees tens of thousands of dollars. If you want to do something great for your employees, do something great for their kids — like getting them into a top school or providing internship opportunities.
A quarter of U.S. workers are either “highly” or “extremely” stressed; half of employees say they would benefit from their employer making mental health help more affordable. But, don’t treat it as if it’s a box to check. Realize that this is what you should do not only to protect your most valuable assets — your employees — but also because it’s what caring companies do.
Understand that you can be part of the solution, but your company might also be part of the problem. The stress could come from a lack of professional support, unclear or unstated roles and responsibilities, broken work boundaries and a stigma around the need for self-care. In addition to addressing those unmet needs, you could enhance medical coverage, provide mental health counseling, subsidize child care and offer flexible schedules.
Working from home may not be an adequate flexible-schedule strategy. My company, Berkshire Money Management, has had luck employing a personal assistant for employee use. Our assistant helps with errands, deliveries, waiting for cable or appliance installations, pet watching and whatever else might save employees a few hours per week — reducing stress and freeing up the opportunity to enjoy time away from work.
But, an assistant can’t go to medical appointments, the gym, or watch a child’s school play. Flexibility means allowing workers to have a life during work, not just after.
Your company could benefit from this advice, but it will help more if you customize the actions. The process alone of customizing your advice is beneficial. Speak to your employees and ask them about their concerns and how you can support their ambitions. Ask deep, open-ended questions in these retention interviews, such as, "Does your position make good use of your skills?” and “What would your dream job look like here, and what can I do to make that happen?”
Let your people know they are heard, and you want them to advance within the company.
An attitude of people over profits goes a long way. Nothing attracts top talent like culture. Nothing creates profit like top talent.