We may have moved into a new year, but the challenges around employee recruitment and retention remain a big issue for leaders – especially for those running services businesses. So much so that Tercera put the people shortage at the center of its 2022 predictions.
But why are so many people leaving and switching jobs?
The most obvious answer is the pandemic. The seemingly never ending ups and downs of COVID’s global impact have changed us. It’s left many people (especially in tech, healthcare and the service industry) burnt out. It’s forced many people (especially working mothers who can’t find adequate childcare options) to leave the workforce.
But mostly, it’s changed our priorities. Many reprioritized family and don’t want to give that up. Some, like me, saw it as an opportunity to finally start our own business. Some are ready for a bigger challenge or a bigger job, while others want less stress. The pandemic ignited a lot of introspection on who we want to be and who we want to be with, what we want to do and where we want to do it.
As employee interests, motivators, drivers and priorities recalibrate, companies must recalibrate as well. It’s now an employee’s market, and if they feel like their current employer doesn’t understand them, support them or provide growth opportunities, I promise you, they will leave.
As employee interests, motivators, drivers and priorities recalibrate, companies must recalibrate as well.
In a recent LinkedIn post, I asked my network why they accepted a new job offer. I received more than 40 responses and the vast majority of them fell into three categories – growth & development, balance & flexibility, and leadership & culture. Compensation was only mentioned in 20% of responses.
If these are the reasons why people are leaving, these can also be the reasons why people stay at a job. Which is where leaders should focus if they’re trying to retain employees.
Here are 6 concrete strategies to start re-recruiting today.
1. Take 50% of your 2022 recruiting budget and allocate it toward your present team.
You likely have already increased your budget for recruiting in 2022. That’s good because good recruiters are as in demand as the tech talent they’re trying to recruit, which means salaries and fees are increasing. However, your overall people budget is going to keep increasing if you don’t double down on keeping the employees you have. Recruiting, onboarding and training a new employee is far more expensive than retaining an employee.
So take that recruiting budget, and allocate a significant portion to re-recruiting your existing employees. It doesn’t have to be 50%. Everyone’s recruiting budget is different, but it should be meaningful. Then divide the re-recruitment budget into two areas – compensation and L&D.
While compensation might not be the main decision for employees taking a new job, it does have an impact. If employees are being hit by recruiters for 2x the money they’re making at your company, they’ll be more tempted to take that call if they feel they are well below market.
First, if you haven’t conducted a market analysis for compensation in a while, start there. A lot has changed in the last year. Then perform a compensation review across the company to look at pay equity and alignment between existing employees and new hires.
External firms and consultants can be utilized to support this work as the market is moving so quickly right now. Here is a great resource on why to consider multiple benchmarks and how to think about an advisor in this area.
Consider more than just base salary. Variable compensation is an important piece of total compensation – especially within a services organization.
Use this data as a guide to make adjustments and guide performance-driven compensation decisions. Consider more than just base salary. Variable compensation is an important piece of total compensation – especially within a services organization. But before you reach for that tool in the toolbox, spend time to understand if employees see variable comp as part of their total compensation. Is it driving the right behaviors? If not, you might need to make some changes.
Learning and Development
With growth being near the top of what employees are looking for, placing a budget here will make a significant impact on employee retention. Oftentimes, business leaders believe they are sufficiently investing in this area. However, this mindset does not always transfer equally across the company, especially as employee interests and motivators shift.
According to Heidi Spirgi, Chief Strategy and Growth Officer at Cornerstone and a fellow Tercera Advisor, Cornerstone’s research shows that 90% of business leaders feel confident they have the resources and ability to develop employees’ skills for the future. However only 60% of employees share that confidence and nearly 40% of employees feel they are not enabled by the learning sources provided at their companies.
90% of business leaders feel confident they have the resources and ability to develop employees’ skills for the future. However only 60% of employees share that confidence.
With this in mind, how can you individually advance employee skills as the marketplace evolves? Start with your regular check-in meetings. In these meetings, confirm what tools they need to grow and ask personalized questions. For some examples of things to ask, click here.
Following these 1:1 meetings, collect the data from across managers, analyze the trends and take action individually. As Heidi states, “by gathering a deeper understanding of employees’ individual skills, it’s easier to locate adjacencies and develop new skills with speed.” In tandem with this personalized approach, talk to advisors and look at what competitors are doing to provide viable opportunities to their team members.
2. Create opportunities for cross functional projects and peer to peer learning
Cross-functional projects give people an opportunity to work alongside and learn from other team members. This can not only foster innovation and personal career growth, it can also create a stronger connection between peers because they understand the roles and ramifications of the work across a broader organization.
Cross-functional projects can not only foster innovation and personal career growth, it can also create a stronger connection between peers.
Cross-functional work can be created in any number of ways, from more informal assignments to more structured rotational programs or innovation labs. Zennify is a great example of the latter. The company created its employee incubator, Zennlab, to meet its employees’ desire to work together to create, experiment and come up with solutions while also adding value to customers and the business.
Peer-to-peer learning opportunities are also a great way to multiply skills and strengths, and create a collaborative environment among existing and new employees. Could you set aside one day a quarter as a “professional development day” where you invite employees to sign up and teach a topic they’re skilled at or bring in an expert or customer for a deep dive in a particular area?
3. Consider internal candidates before recruiting externally
Hiring within your company accomplishes a number of things. First and foremost, it shows employees that you care about their growth and development. In many cases, it can also be better for the business.
With an internal candidate, one is typically already ingrained in a company’s culture and unique way of doing things. The employee has the existing relationships and understands the customer base. This means they can be far more productive in their first few months in a role compared to developing an external candidate.
If an individual has only one skill gap, can you invest in growing that specific skill over a specific time period? Could you send them to a training class, or pay for them to get certified in a new skill? If so, a 3-month training program might be better for the business and the individual than a 3-6 month ramp of a new hire.
Even if you decide to hire externally, having direct conversations and open dialogue can help employees see potential growth opportunities, creating a more empowered and devoted employee.
4. Get smarter on what flexibility and time off looks like within your organization
Personal and career growth may be the top reasons why people leave or stay at a company, but balance and flexibility are a very close second. Before you start implementing policies to meet this need, spend time to understand what flexibility and time off really looks like within your culture.
- Do you support remote work or are you an in-the-office culture that lets people work from home periodically? Is it part of your long-term strategy? How do you support and empower in-office and at-home workers equally?
- Do your incentive comp plans and structures support how much time off you and your employees would like? If utilization targets at 100% only align to 2 weeks off per year, there may be an opportunity to re-evaluate your targets.
- What expectations are set around projects when employees are out? Do employees know how to create coverage plans when they are out so they do not always feel “on” even when on vacation?
Companies across the board are experimenting with ways to reduce burnout and retain employees who are looking for more balance. These could include:
- A designated day for no internal meetings
- Planned days where the whole company is off outside of typical holidays, ranging from a couple Fridays per month to an extra week off during the summer or winter
- Allocated mental health days
- More flexible work models like part-time roles or a 4-day work week
There is not a one-size-fits-all approach. The key is to understand what your employees are looking for and how that can work within your organization and culture, and then putting in place and communicating policies that make sure employees understand what’s available to them.
5. Allocate time on your calendar to do simple things that show you care
Small actions go a long way in reminding your current team of their value within your company. Think of a time you received a handwritten note from a leader or co-worker or even a personal milestone was acknowledged. It probably left an impact on you.
When family members or partners are included in these gestures, it can create deeper connections within the company.
When family members or partners are included in these gestures, it can create deeper connections within the company — whether that’s a note to a spouse picking up the slack at home during an intense project or sending a holiday cookie making kit to someone’s kids. When I left Appirio my kids could not imagine me working anywhere else. They had all the swag, knew all the Appirio kids and loved the different events they were involved in. It made it harder to leave.
It could just be a phone call from an executive or manager to say “thank you” for going above and beyond, or to share positive feedback from a client, or for referring a phenomenal new employee who has made a big impact. Take time to understand what ‘little things’ matter to the individual. Some people hate public recognition. Some people love it.
6. Systematize a peer-to-peer rewards program
Consider ways to implement a process for peer-to-peer rewards. This could look as simple as promoting a slack channel for shout outs and making sure executives are highly involved to allocating a budget for gift cards or company swag. At Appirio, we developed a system on our Salesforce CRM platform that allowed for managers and peers to allocate points to employees that could be traded in for special items within our company store. Employees loved it, it encouraged peers to appreciate each other, and made even the quietest “behind the scenes” star performers more visible to management.
These recognition programs don’t have to be expensive to work. According to a Bonusly article, “81% of companies that include a recognition program in their budgets spend less than 1% of their payroll budgets on these programs.”
These are just a few ways you can shift your mindset toward re-recruiting your current team. Don’t get me wrong, recruiting new talent to your organization is still critical this year, but don’t forget it’s your current team who is critical to interviewing, onboarding, recruiting and training those new team members.
It’s time to re-recruit your current team before someone else does.