Who is driving the Great Resignation?
Jobs in retail and healthcare are most at risk for high turnover due to the high demands and stress of working throughout the pandemic that caused irrevocable damage to employee loyalty. The tech industry also saw high turnover rates due to burnout, but they also had more competitive remote work options to turn to.
While it is typical for younger employees to have a higher rate of job turnover, that has recently shifted to employees aged 30-45 years old with an increase in resignations in this group by over 20% between 2020 and 2021. The US Great Discontent survey report also finds that employees in this group are more likely to be passively open to new opportunities than other age groups.
Younger employees are less mobile due to lack of job security while Boomers and Gen Xers are more content with their current employment.
Employers should perform their own self-audit to determine what is causing employees to resign if it does not fall under these more obvious categories.
Certain benefits such as working from home have become a premium in the job market due to the pandemic. As the appeal of juggling two workspaces fades, hybrid jobs do not inspire as much employee loyalty as fully remote jobs – 58% versus 73% employee loyalty. Considering desirable benefits that will inspire loyalty will be necessary to avoid costly high-turnover rates.
The cost of high employee turnover
The cost to replace an employee in terms of marketing the position, paying recruiters, interviewing, relocation costs, signing bonuses, and training the replacement comes to about 33% of an employee’s annual salary according to a retention report by the Work Institute.
It will also take time before the new hire is productive – in other words, the time to ramp, as Workable CFO Craig DiForte describes it – and this factors in lost revenue. These hiring costs can add up when one in three hires leave a company in their first two years and is why it is most beneficial to emphasize best practices for employee retention.
An unfortunate hidden cost of high turnover is that the workload falls on the remaining employees who must pick up the slack until the new hire is up to speed. This can be damaging to staff morale which makes it important to add incentives for those loyal workers who remain before they become resentful.
How to improve employee loyalty and retention
For the employees who remain loyal it is important to recognize when they go above and beyond their job description, especially for those who are responsible for training new hires and picking up the slack. Workers who feel appreciated by their supervisors – and are well-compensated – are more likely to stay. This, again, is confirmed in the Great Discontent survey, with two-thirds of US workers saying they need to make more money as a reason why they’re looking elsewhere.
One proactive solution is to incorporate team-building exercises because keeping employees happy translates to higher productivity which is the ultimate goal. Employers will need to make time in their schedule to be accessible and communicate with their team either at work or at more relaxed employee excursions like going to a sporting event, playing mini-golf, or participating in an escape room experience.
There are other ways to make employees happy that do not cost anything. Some workers simply desire career mobility and transparency about how they can grow in their roles at work. Providing job training and a clear path to career advancement are important to keeping loyal employees – 47% of survey respondents reported that feeling stagnant in their roles was the main reason for looking for a new job that had more opportunities for growth and fulfilment.
Hiring and recruiting strategies
Hiring a new employee is an investment and it is important to establish honest job expectations from the start to guarantee that you do not end up wasting each other’s time – not to mention the money involved in training a new hire.
Employers should carefully craft their job description to reflect their company values and should not shy away from explaining the job role in detail.
Future interviews and training should reinforce these ideas so there is no confusion regarding expectations.
It can also be helpful to advertise the fun company culture in job advertisements since workers who are leaving due to burnout may be seeking a better work environment.
It is not enough just to be fun right now because the pandemic is still a serious issue affecting job searches. Offering healthcare benefits is more important to employees than ever due to the pandemic and putting onerous restrictions on when benefits go into effect can deter applications.
Advertising initiatives for mental health resources can be a useful selling point as well and should not be overlooked. Social isolation from remote work is one of the downsides despite its popularity and proactively addressing it instead of ignoring the problem that so many are now facing can be a marketable feature for your employer brand.
Visibility is the key to future-proofing your business
The first step to creating a targeted retention program is to establish greater visibility into the root causes of turnover. This may also involve having uncomfortable conversations with employees that have chosen to resign by performing exit interviews. Ultimately, this data will empower your business to attract leading industry talent, retain loyal employees, and reduce turnover costs.