As we begin the countdown to 2023, one topic that should be on every business leader’s mind is employee engagement and retention. Just a year ago, we saw some 47 million American workers leave their jobs in a phenomenon that came to be called the “great resignation."
Although many of those folks eventually returned to the workforce, the job market is still recovering from this mass exodus. At the end of September, there were 10.7 million jobs open — slightly higher than the 10.6 million jobs open in September 2021 — and the voluntary quit rate remains about 25% higher than it was before the pandemic.
It’s no surprise that many employers are working to bolster their employee retention strategies. A recent study by Paycor found that retention is the biggest employer priority of 2023 (20%), followed by recruiting (14%) and company culture (12%).
Why Are So Many Companies Struggling With Employee Retention?
There’s currently an imbalance between employer demand for talent and the number of workers willing to supply it. Many employers still rely on traditional levers like compensation, job titles, and advancement opportunities to attract and retain employees.
Although these offerings are still important to many workers, the COVID-19 pandemic has opened up avenues for more people to reevaluate what they want from life. As a result, they’re more closely considering how their employment choices factor into those goals. For many of these workers, traditional employment structures no longer mesh with their new priorities.
This means there simply aren’t enough employees available to fill all traditional job openings. Some employers are able to work around this gap in the labor market by recruiting from their competitors, but this tactic isn’t enough to overcome the realities of a labor shortage. In fact, this reshuffling of talent has only contributed to wage escalation.
Some analysts are pointing to signs that the “great resignation” might be slowing down, but employers must still reconsider their employee retention strategies if they want to hang on to their top talent. These efforts should not only take into account that workers might be easily wooed away by the competition, but they must also consider emerging challenges like inflation and soaring healthcare costs.
The latter is a particularly salient point for employees who are concerned about keeping themselves and their loved ones healthy. Rising healthcare costs are causing many people to skip preventive care, wait longer to seek diagnoses for chronic issues, and even defer treatments.
To that end, it’s vital that employers carefully consider their investments into employee benefits packages. After all, understanding common pain points and anticipating team member needs is one of the most important aspects of employee engagement and retention.
How to Craft Employee Retention Strategies for 2023
As we head into the new year, it’s a fantastic time to take stock of your company’s offerings. Designing them around the current climate’s biggest concerns will help your employees feel valued and understood, ideally limiting attrition and absenteeism in the process. When brainstorming employee retention ideas for 2023, consider the following:
Know your turnover risks.
To create truly impactful policies and benefits packages, you must first understand which factors are most likely to cause employees to leave. Do your competitors offer more in terms of compensation and comprehensive healthcare plans? Or are your employees struggling with burnout?
Consider flexible work arrangements.
Life doesn’t always happen before and after business hours. This is especially true for employees who might be caring for children or aging family members, receiving certain types of medical treatment, or living with invisible illnesses.
Some companies are addressing these concerns by embracing more flexible work arrangements. Workers might have the option to work from home at least part of the time or to stagger start and end times around when they are at their most productive. Employers that offer additional options are more likely to attract and retain employees who might not fit well into rigid 9-to-5 setups.
Improve onboarding and communication processes.
Regardless of their qualifications and previous experience, new employees can find it difficult to navigate the ins and outs of a new company in those early days, weeks, and even months. How does onboarding improve employee performance and workforce retention? By highlighting resources and solutions to questions they might have. Whether you focus on instructional materials regarding company policies or reminders about open enrollment, you’ll help your team members gain a stronger sense of belonging.
Provide opportunities for workers to grow.
Most employees want to advance in their careers, so opportunities for upskilling and additional education can go a long way toward improving employee retention. Skills development isn’t the only area for growth, though. Some companies also boost engagement by supporting employees in their volunteer activities. This could include matching charitable donations or providing paid time off for a certain number of volunteer hours each month.
Offer benefits that truly help.
Employees have no shortage of options in terms of where they work, so companies need to find ways to stand out from the crowd. To that end, it’s important to offer a comprehensive benefits package that includes features like 401(k) accounts or other workplace savings plans; health insurance that covers not only preventive care and prescription drugs but also vision, dental, and mental health; paid vacation and holidays; and other paid time off such as family medical leave and parental leave.
And when you spot gaps in your benefits offering, find ways to fill them. An increasing number of employers are using Health Payment Accounts (HPAs) to give their employees the power to pay for care. By providing their team members with an interest-free line of credit for out-of-pocket healthcare expenses, employers are able to encourage preventive care and ensure everyone gets help when they need it.