When the competition for talent is fierce and monopolizes headlines in business publications, it sends a signal to employers to think through current workplace policies and practices to ensure they are competitive—that they are attracting the talent that best aligns with their workforce needs.
But it can also be a time to think more strategically, to assess how (or if) workplace policies have adjusted to changing circumstances, and how such policies and practices could impact business beyond next quarter. It is an opportunity to move from reactive planning to proactive, to implement promising practices that directly address business needs while also addressing the needs of workers, improving the quality of jobs to the benefit of all.
Attracting and retaining talent is an ongoing business challenge. In this chapter, I consider three key talent challenges businesses face—turnover, engagement, and productivity—and offer potential solutions that would positively impact the quality of jobs.
Most companies don’t have systems in place that track costs of turnover, including expenses such as recruiting, job posts, interview time, potential customer dissatisfaction, and administrative costs. These systems depend on collaboration among departments (human resources, finance, operations, etc.), a means of measuring these costs, and reporting mechanisms for which most of America’s small and medium-sized businesses simply do not have the resources.
Programs that help reduce dysfunctional turnover have the potential to unlock significant business gains and opportunities for employer partnerships. Turnover rates are as high as 53% in the retail trade industry and 73% in the accommodation and food services industry1. High turnover rates can be detrimental to businesses, workers, and sectors. The Society for Human Resource Management (SHRM) averages cost per hire across industries at $4,129 per person, which is compounded by new hire onboarding and training. A Center for American Progress issue brief states that turnover costs are at least 16% of the annual salary for high-turnover, low-paying jobs (earning under $30,000 a year), making a $10/hour retail employee cost $3,328 in turnover2.
The reasons for turnover vary. A Gallup poll reveals that the top reasons people voluntarily leave a job are pay and benefits, career growth opportunities, manager or management, or fit***. Although the poll did not categorize survey takers into wage grades, a reason like “pay and benefits” is relative to any one person’s current needs and situation, like many of the other reasons. Employers embracing these reasons and making intentional investments toward improving their turnover can find solutions within the job quality agenda.
According to the Aspen Institute’s 2017 Job Quality Fellowship, job quality means that “one’s work is valued and respected and meaningfully contributes to the goals of the organization. It encompasses having a voice in one’s workplace and the opportunity to shape one’s work life, as well as having accessible opportunities to learn and grow.” Below are solutions that any employer can execute to increase employee retention. Unless otherwise cited, the “promising practices” offered throughout this chapter come from the author’s work, experience, and interactions with employers.
Creative solutions to fill in the pay and benefits gap include fresh approaches to company processes, human resource systems, and basic work scheduling. Solutions to pay and benefits challenges can contribute to lower turnover rates of low-wage workers.
#InvestinWork book explores promising solutions to #turnover, #engagement and #productivity in a chapter by Liddy Romero - read it now for free @federalreserve @heldrichcenter @RayMarshallCtr @UpjohnInstitute
1. Bureau of Labor Statistics 2018)
2. Boushey and Glynn 2012
3. Robison 2008