2018 Hiring Trends: Increasing Focus on Retention
Competition for talent in California is only getting more intense. Low unemployment rates (just 2.8% in Sonoma County for December 2017) coupled with lagging labor force participation and growing skills gaps are making it increasingly more difficult for employers to find and retain qualified candidates. In a statewide survey of hiring managers conducted by the staffing company Nelson, California employers named “talent acquisition and management” the number one challenge their businesses currently face.
If your company is trying to compete for talent in Sonoma County, one of the best strategies you can employ in 2018 is actually to shift some of your focus away from hiring and recruitment and toward retention strategies to help ensure you retain your top talent and reduce the need for hiring-related challenges before they even begin.
Why Focus on Retention?
Employers spend, on average, around a third of a manager’s annual salary to hire a replacement–or more than six times that if the employee’s role is highly specialized role. Total costs can easily add up to the tens of thousands of dollars. And that doesn’t take into account the cost of your current employees’ time when they drop their regular responsibilities to focus on reviewing resumes, interviewing, training, or picking up slack elsewhere.
Turnover’s impact extends far beyond higher direct recruiting costs: it can negatively affect productivity, morale, and retention, and hiring. When employees leave, gaps in coverage, skills, and knowledge may result morale dropping, missed goals, and burnout, which can lead to further drop in productivity or more resignations. Plus, new employees must be trained, which delays return to previous level of productivity.
These unspoken costs can contribute to even higher recruiting costs, and thus more turnover. Negative reviews on Glassdoor or other company review sites or a lack of employee referrals, or even unenthusiastic interviewers can all make recruiting harder AND more expensive.
How to Improve Retention
To slow the revolving door and reduce turnover, there are a variety of effective strategies employers can use.
1. Understand Every Employee is a Potential Job Seeker
Millennials are more likely than Gen Xers or Baby Boomers to consider leaving their roles in the next two years, and TopResume estimates that that 73% of workers are open to hearing about new opportunities. As an employer, you first need to be constantly aware of the state of your workforce and proactively plan retention efforts.
2. Provide Growth Opportunities
Invest in retention strategies to increase the likelihood that employees will want to stay and grow with your company. Prove to your employees you want them to stay by defining and sharing paths for upward trajectory within your company and providing training to achieve those next steps.
3. Train Leaders
If employees are leaving because of the culture or their direct manager(s), you can create opportunities for retention by making sure your managers and leaders are trained to effectively manage conflict.
4. Boost Compensation, Benefits, and Perks
In Nelson’s survey, more California employers reported this year that new-hire salaries were holding steady or rising. This reveals that wages–mostly stagnant since the recession–are beginning to creep up, at least for new hires. Despite this, only 2 percent of employers reported providing a standard salary increase of 5 percent or more for current employees. Employers need to be cautious of higher turnover rates caused by employees switching jobs in search of salary increases, more perks, or better benefits.
While it may not be in the budget to offer pay increases across the board, consider the costs of recruiting and hiring. If you can offset those costs with even a fraction of what you’d spend to hire new employees, you can show employees that you’re invested in their long-term stay with the company.
5. Pay Attention to Workplace Culture, Social Responsibility, and Other Factors
Your culture matters. Today’s employees want to feel like they’re doing a job that matters and connected to colleagues. Whether it’s monthly lunches, stand-up meetings, parties and celebrations, dress-down Fridays, or group charity projects, work with your teams to ensure a consistent, positive workplace culture that supports your employees.
6. Consider Outsourcing More Hiring Efforts to Focus Internal Resources on Retention
While outsourcing retention efforts can be difficult because you know your team best and which strategies will be most effective, you may be able to outsource some of your hiring initiatives. The increased efficiencies and pools of pre-selected talent staffing companies offer may allow you to save time and resources, which can be redeployed towards your retention efforts.
By employing these tactics, your company can reduce your turnover and increase your chances of workforce success in today’s low-unemployment environment.
Prepared by Nelson.