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How to retain employees in the age of The Great Resignation

February 23, 2022

How to retain employees in the age of The Great Resignation

Synopsis
8 Minute Read

Welcome to the post-COVID workforce: Employees are quitting in record numbers after enduring one of the most significant economic and workplace disruptions in history.

Senior Manager

Welcome to the post-COVID workforce: Employees are quitting in record numbers after enduring one of the most significant economic and workplace disruptions in history. The exodus has set off a rapidly worsening labour shortage and skyrocketing hiring costs, leaving employers to wonder what it will take to stem the losses. 

If this sounds all too familiar, you’re not alone. A survey conducted in October 2021 revealed more than 53 percent of employers in several countries (including Canada) are reporting turnover rates at an all time high. And the reasons people are leaving are as varied as the number of industries affected.

Some employees have become lonely and disillusioned after nearly two years of working remotely. Others are looking for arrangements that will enable them to work from home permanently. Many more are feeling burned out by the incrementally longer days, reconsidering their life goals and priorities, and/or wondering if there’s a better way to define themselves outside of what they do for a living.

In other words, millions of Canadian employees are fleeing for the same off-ramp and there isn’t a succinct answer to explain their actions — save for the intensive soul searching that took place during the pandemic.

Why do employees leave?

The average employee tenure has now dropped below three years in many parts of North America. This is troublesome given the significant costs of recruiting, onboarding, and training new staff — not to mention the difficulties it causes for longer term workforce, operational and strategic planning.

With the question around wages continuing to dominate the media conversation, it’s natural to question whether a higher paycheque might be the fastest and most cost-effective way to stem the exodus. After all, we’ve all seen the reports of people leaving their current role for hourly rates and better perks.

But could it really be that simple? Are people weighing anchor in search of a better bottom line — or are there other forces at play?

It’s not all about money

There’s a temptation to paint employee departures with a wide brush. We’ve all heard the phrases, “they’re chasing the money,” or “people don’t quit jobs, they quit managers.” But simple answers do little to address potentially systemic challenges and prevent subsequent departures.

Before kicking off a bidding war or jumping to conclusions about what’s happening within your own organization, it may be helpful to zoom out and consider all the factors driving employee decisions.

We can bundle common causes of employees leaving into four main categories:

  1. Employee dissatisfaction — An employee may feel bored or unchallenged in their work, or they could feel like their contributions are not getting the recognition or appreciation they deserve.
  2. Better alternatives — A competitor, different industry, or different profession may offer opportunities for better career progression or compensation.
  3. A planned change — An employee may want to pursue new avenues personally or professionally which are incompatible with their role. For example: a geographic move or leaving the workforce to care for a young child. Some people value change and will move before they lose interest in their current role.
  4. Negative experience — Something happens to sour the employees relationship with the employer. For example: a poor onboarding experience, internal strife or conflict, inattentive / unsupportive management, misalignment of corporate and personal values.

That money may factor into any (or none) of the categories above adds to the difficulty of assessing your current retention difficulties. Even worse is that it can be difficult to get an honest answer from an employee about their reasons for leaving — especially when the speaking honestly risks the employee seeming ungrateful, spiteful, and potentially souring a professional relationship.

By the time you reach an exit interview, it’s too late to retain the employee; they’re already gone or leaving. What exit interviews do provide is the opportunity for a more nuanced conversation. One that focuses not just on pay, but on compensation, and the myriad factors in your control to retain good talent for longer, improve engagement, and increase productivity. It’s what you learn and what you do with this information that will influence turnover in the future.

Remember, people value what they need.

What do employees want?

We now know base salary is only one of many factors today’s workforce considers in determining whether a role and an organization is right for them. Each of these pressure points can be challenging to address as you evaluate your business’ total rewards package and seek to retain key employees.

Making the task more difficult is the fact that employees will not generally consider any one concern in isolation. The totality matters — and getting the mix right can be challenging when life seems to be evolving faster than professional opportunities or employers’ responsiveness to changing wants and needs.

From the outset of the pandemic, we’ve seen an unprecedented shift both in what employees expect and what employers are willing to offer to retain skilled talent:

  1. Compensation levels trending upward — Compensation levels are rapidly rising above the pre-pandemic baseline after largely remaining stagnant in 2020 and 2021.
  2. Better performance targets and bonus structures — Employees want more clarity on how their performance is being measured and how that impacts quarterly or year-end incentives. Employers, need better metrics and benchmarks to measure productivity and how employees create value.
  3. Benefits that fit the person — Health has been a core personal focus throughout the pandemic and employees now expect employers to offer employee benefits. But more importantly, they also expect greater flexibility in how they can leverage their benefits to meet their unique needs and lifestyles.
  4. Focus on physical and emotional wellbeing — Employers can no longer be satisfied with merely providing a safe and discrimination free workplace. There’s growing desire for more comprehensive mental and emotional wellness resources, and support for emergent situations which ebb and flow over the course of life.

Navigating the culture conversation

Culture is another key, yet all too often overlooked element of the conversation — and a particularly timely one given the significant shifts we’ve seen throughout the pandemic. Consider two enduring truths:

  1. Nearly every potential hire will ask about your organizational culture during the recruitment and interview process.
  2. Every organizational leader has a strong attachment to their culture, and many will work tirelessly to preserve it — even when it’s already changed or no longer serving their (or their employees’) needs.

One way to define culture is “the values, beliefs, and behaviours that guide and define the way a group of people work together.” It’s the glue that holds groups together — absent which direction and purpose fade, cohesion breaks down, and the bonds tying a person to the organization weaken.

People will only work with your organization if you can offer something they value. And what do they value? They value what they need.

If we look at a trusted archetype like Maslow’s Hierarchy of Needs, we get an idea of what these values include: food, clothing, shelter, and safety — but also belonging, purpose, recognition, and growth.

Any job can provide the basic elements (money, health benefits, etc.). Every employer should also provide a safe and inclusive environment. But you risk losing good talent if you’re not continually adapting and creating an environment where employees feel connected to one another, a shared mission, and a clear idea of who they can become. 

How can you adapt to the new reality?

Given all the challenges employers have faced over the past two years, it can be tempting to lament this latest shift as one more difficulty to add to the list. Stratospheric turnover numbers are certainly deflating. However, finding and retaining good people has always been one of the biggest financial and logistical challenges for employers — and what constitutes a desirable total rewards package has always been a moving target.

The pandemic and the unique impacts of working from home, glut of employment opportunities, and changing workforce expectations are in many ways new and unprecedented. But when you break them down, you begin to see root issues that are as old as the employer / employee relationship:

People want…

  • Fair and competitive compensation
  • Clear boundaries between home and work life
  • Incentives and recognition that reflect their effort
  • To feel their employer supports their evolving needs and goals
  • To do work and work with people that align with their values

The bad news is many anticipate these difficulties will continue or accelerate for several months to come. The good news is just because turnover is happening broadly doesn’t mean it’s written in the stars for you. The situation may have changed, but your steps and best practices to respond are timeless — at least in theory, if not in practice.

Review and redefine goals and expectations for rewards

Assess your current compensation policies and incentive structures and evolve these as necessary. Employees have a right to know both what you expect and how they’ll be measured.

Are your expectations clear and do you have transparent benchmarks for various roles in your organization? Setting these out in clear language and following through on promises is one of the easiest ways to build trust and keep people motivated and engaged in their work.

Communicate frequently and proactively

Proactively reach out and check in with team members. Senior leaders and managers need to be visible and available to employees, and not just amid a major challenge or change.

The pandemic aside, many major issues start out as small questions or concerns. Communication builds rapport and makes people feel more comfortable with addressing those minor issues before they materialize into a toxic work environment and thoughts about quitting.

Review total compensation structures

Compare your salary bands, performance incentives, benefits, and resource offerings to industry and nationwide benchmarks. This doesn’t necessarily mean you have to break the bank or offer a wildly extravagant health spending account. After all, we know pay is only one factor among many driving employee decisions.

Consider the range of concerns your team may have, including how they’re being empowered to spend and invest in their off-work hours. Build a total rewards package that acknowledges their experiences throughout the pandemic and how their priorities may have shifted as a result.

Set priorities

Get clear on your specific recruitment, retention, and compensation challenges and what you need to do about these. Work with your HR and leadership teams to create an itemized list of what to improve, when to improve it by, and how to improve it.

It’s tempting to read the latest expose on the Great Resignation and project your own situation on a highly generalized portrait of the status quo. Remember, those authors have no knowledge of your organization, your people, and your specific business environment. Heed their advice, but also take pause to ensure you’re not overly fixating on things that are working well at the expense of those that aren’t.

Promote collaboration

Focus on creating an environment where people feel empowered to communicate, connect, and collectively learn. Human beings are inherently social animals. We need relationships, and we need to feel like we’re part of a group that looks out for and supports one another.

One of the biggest challenges of a predominantly remote workforce has been how to bring people together and facilitate collaboration virtually. Look for ways to support team cohesion — especially if you plan on preserving a work from home option.

Build culture and community

Approach your culture as something that is dynamic, malleable, and highly sensitive to internal and external forces. There’s no doubt you’ve invested heavily in building a culture and community you’re proud of. But the pandemic has changed the broader business environment, and it’s caused many of your people to re-think what they want and need out of a career.

Your culture is not the same as it was in 2019 — and it will continue to evolve, with or without your input. This isn’t about re-creating your culture so much as it is about ensuring alignment between both the business’s and your people’s values, actions, and beliefs. You have immense power to influence how culture shows up for your business and your people.

Remember, people value what they need. What do your employees need? And how can you make sure they’re getting it?

To learn more about MNP’s Organization Renewal practice and practical opportunities to improve your employee retention, engagement, and productivity, contact Jim Cruickshank, Human Capital Consulting Leader, at 289-293-2372 or [email protected]

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