When it comes to successful hiring and retention, pay rules. Thanks to data from our new study—“The U.S. Workforce Report: Attracting Talent and Retaining Employees”—we have up-to-date confirmation of that. Per the report, which surveyed over 1,000 American workers from coast to coast, pay is easily the number one job factor.
The top job factors for America’s workers:
- Salary/wages: 42%
- Work-life balance: 21%
- Health insurance: 9%
- Skills training/career growth: 9%
- Workplace culture: 7%
- Co-worker relationships: 6%
- 401(k): 4%
- Rewards/recognition: 2%
A recent quote in CNBC from Amy Glaser, Senior Vice President at Adecco, explains how companies are starting to pay more, albeit slowly.
“It’s truly a candidate’s market, and companies are really struggling to find top talent. So we’re seeing them make concessions. Most of my discussions now [with employers] tend to be what is the return on investment they can expect when giving a raise to their employees.”
One objective way to measure return on investment is via retention—or, essentially, your employees’ loyalty to your business. Fortunately, at least for hourly-wage workers, we’ve made this a science by helping you project how much pay raises will increase retention and reduce turnover costs. According to our in-depth data spanning 40+ companies, there’s a strong correlation between wages and retention.
You can find that data in our wages-retention calculator and even make projections for your own company.
What’s often the case though, is that companies can only pay so much. They want to pay more than competitively, say 75th percentile, (and some are comfortably able to) but due to limited budgets and resources, can only pay semi competitively, say 50th percentile.
That begs the question: How do those companies increase employee retention without better pay?
Push work-life balance.
Work-life balance needs to be an actual thing, rather than a buzz phrase. In a job market with a 1:1 ratio between job openings and job seekers (compared to 6:1 in 2009), it’s difficult to find the talent you need. Companies in your local market—and your direct competitors across the country—are recruiting from the same, relatively limited talent pool.
You should make it clear even before the interview stage that you offer true work-life balance. And you can’t merely say it; you must make it tangible. Whether it’s granting extended paid time off, offering work-from-home weekdays, preventing work-from-home weekends, be transparent across the hiring process, from job ads to offers.
Among the top 20 companies that offer the best work-life balance are In-N-Out Burger, Intuit and Trader Joe’s. In-N-Out offers flexible scheduling for all employees, Intuit encourages employees to spend up to 10% of their work time on more personal ideas they’re passionate about, and Trader Joe’s goes by the mantra “We don’t believe you have to compromise important priorities in your life to be in ours.”
Customize career paths.
Today, career paths are loosely defined. They can exist as formal succession plans or less formal skills development training. Generally, the Baby Boomer generation and Generation X prefer the former, and Generations Y (Millennial) and Z prefer the latter, but that doesn’t always hold true. What does hold true is the fact that skills training/career growth is the third most important job factor to America’s workers.
Career paths should be tailored to every individual—and they should have a major say. Once an employee has proven their value, it behooves managers to start career planning and discussing skills development. This can be at the six-month point or even the one-year point. Whenever it commences, it should be on your terms so that you can display your loyalty to your employees. You invest in them; they invest in you.
One example of skills training that we’re quite proud of here is a partnership between GE Aviation, the Community College of Vermont and Adecco that fostered skills in a local workforce and provided new career opportunities for individuals. Partnerships like this can help companies overcome a lack of human capital and/or available time and develop strong pipelines of talent that are more likely to reciprocate by sticking with your company.
Another way to boost employee retention is through providing a positive culture, and while people are at the center of culture, it starts with a great workspace.
In industrial and manufacturing and construction settings, workers have fought for better workspace conditions for years. Safety is at the forefront of these settings, and while OSHA and state organizations have made—and continue to make—positive impacts, it’s up to you to provide the right environment and implement the proper training that is conducive to a safe work environment. While it may seem like safety training isn’t so innovative, it’s quite the contrary. For instance, Technip USA’s Riad Efendi recently developed an app that allows safety professionals to submit reports with their mobile devices, and In-Source Options’ Frank T.K. Tan recently invented a patented safety system for forklift drivers.
In professional settings, innovation is more about the balance between openness and closeness. This allows workers to effectively collaborate and communicate when necessary and conveniently find quiet and solitude other times. Much of corporate America has done away with cubicle walls in favor of open floor plans, yet retain small, private offices, “phone booth” style areas and even libraries. This enables a mixture of introverts, extroverts and everyone in between to find spots that meet their needs. It also maximizes the potential for creativity.
In today’s tight labor market, your company pays above the 50th percentile at a minimum and above the 75th percentile ideally, compared to both your direct business competitors and local businesses vying for the same talent. However, if circumstances dictate average pay, all is not quite lost. By focusing on secondary and tertiary job factors such as work-life balance, career paths and workspaces, you can offset average pay and build the workforce you need—at least to an extent.
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