How Employers Can Survive The Great Resignation
The Great Resignation is shaking up labor practices. The Bureau of Labor Statistics says that 4.3 million people quit in August 2021. That brings the quit rate up to 2.9%. It’s a record, but it’s one that might be broken in the near future. According to CNBC, a Bankrate survey found that 55% of people in the workforce said they will likely look for a new job in the next 12 months.
The Impact on Employers
There have been widespread reports of companies facing hiring challenges and staffing shortages. Some businesses have even been forced to close their doors because they can’t find enough workers to stay open. Business Insider says that many companies are having to cut back on their services or reduce their hours, and they’re losing revenue because of it.
Turnover can also raise costs. According to Employee Benefit News, replacing an employee can cost a company 33% of the employee’s annual salary. If a worker who earns $45,000 a year quits, the company might spend $15,000 to replace that employee.
The staffing shortage is hard on employers, but it’s also hard on the workers who stay behind. Because businesses are understaffed, they may ask their employees to work harder and longer. CNBC warns that this can result in a vicious feedback loop if burned-out workers decide to quit: 50% of workers describe their workplace as understaffed, and these workers are nearly twice as likely to consider quitting.
Thriving During the Great Resignation
The Great Resignation may last for a while, so employers need to find a way to deal with it.
SHRM say that some companies are raising wages to attract workers. Bank of America said it would raise its U.S. minimum hourly wage, first to $21 and then to $25 by 2025. Walmart, Amazon, and other big companies have also announced higher wages.
However, CNBC warns that experts say higher wages may not be enough. Employers also need to create other incentives to retain workers.
Attractive options might include benefits that help workers balance work and personal responsibilities. CBS News says that women are quitting in higher numbers than men, and it may be because two in three caregivers are women.
Work-from-home flexibility is especially popular right now. FlexJobs says that 58% of job seekers want a fully remote job and 39% want a hybrid arrangement. Many workers are willing to quit if they can’t work remotely, with 44% of respondents saying they know at least one person who has quit or is planning to quit because of in-person work requirements.
Employers that need to hire workers should also make sure their automated resume-scanning software isn’t sabotaging their recruitment strategy. According to Verge, these programs are used by up to 75% of employers, but a report from Harvard Business School found that they may mistakenly screen out millions of viable candidates.
Human Resource Strategies to Consider
- Find ways to show existing employees how much you value them and help them achieve work/life balance. If possible, infuse some flexibility into their work schedules.
- Get creative with your employee referral program. Great employees tend to know other people who will be great employees. Use a reward now AND later system, in which employees receive something immediately when a referred employee comes to work – such as a gift card or tickets to a sporting event. Then, provide a monetary award later if that same referred employee stays on board for a year.
- Relax your experience criteria. If you are having trouble finding experienced people in your industry, focus on other industries that foster similar capabilities. If you need a great project manager or salesperson, consider hiring an experienced restaurant server, for example. Get creative with your search.
- Treat job candidates just like you treat hot business leads. Make job offers quickly. If they accept, over-communicate, proactively onboard, differentiate the employee experience, check in frequently and never leave them hanging. Assume that at least three other companies are also making offers.
- Provide a career and money roadmap. Everyone wants to know how they can move up and how they can earn more. Be transparent and forthcoming with this information to better motivate and engage your team.