In the throes of low labor force participation and high labor demand, the competition for talent is fierce. As it stands, it’s a job seeker’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 the reluctance of some companies 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.
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, not only is there a race 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.
To address the current inflation rate of 8.8% — an increase not seen since December of 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.
The effects of inflation don’t stop there. Gas prices have also been on the rise a result of the global pandemic and the war in Ukraine. Workers who typically commute to and from the office are spending a large percentage of their monthly income on gas.
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.
The modern worker is not only looking at pay, benefits and number of 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:
The same survey released by The Conference Board also revealed that 43% of workers left or plan to leave their jobs for salary increases, 32% for career advancement, 31% in favor of workplace flexibility and 27% due to disappointment with their current / former company.
Onboarding takes at least three months, but in many cases 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 around for the long haul.
To drive home the importance of retention strategies, the Society for Human Resource Management reports, “companies spend between one-half and two times employees’ annual salaries to replace them.” Working with a managed solutions partner who understands business operations means you can maintain oversight of core operations while they fill potential retention gaps, and ultimately save 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 they can also help you attract those job switchers who are keeping an eye out for better opportunities. Not to mention, by supplying contingent workers that 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, 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.
To remain on top of market trends to better assess and meet evolving employee needs, check out Aston Carter’s monthly labor report.
If your company could benefit from the help of a managed solutions provider, contact Aston Carter today.