Over the past few years, across nearly every industry, region and skill-level, our business culture has had to quickly readjust expectations on what “employee churn” and turnover looks like and how it can impact business. The global pandemic and resulting workforce and lifestyle adjustments have reshaped employees’ expectations of what a good job looks like, and employers are struggling to keep up.
Now, with labor shortages being felt across the board, an exiting employee no longer has as much potential for replacement as was once the case. According to the Society for Human Resource Management (SHRM), the cost of replacing an employee is around one-third of that worker’s annual earnings. Do the math for if you had to replace your highest-paid employee. That’s expensive!
Back in 2019, even before the pandemic, the labor market was tight, with unemployment levels falling to their lowest point since 1969. When the pandemic hit, office workers and their employers had to quickly adjust to remote work environments, while service-industry workers were dismissed in droves or forced into awkward workarounds intended to accommodate prevailing health-related concerns.
Employees suddenly were faced with a reckoning. Their once-familiar jobs had turned into something entirely different; technology became a requirement for non-tech-savvy people, jobs that were supposed to be focused on human interaction (management, HR, etc.) now included added difficulties of trying to connect over screens and cameras; in short the work environment was in shambles.
Employees responded to this sudden sea-change with what appears to be a collective reckoning. Faced with jobs that barely resembled what they had applied for, or what they had been doing only a few months ago, employees began to ask themselves if these jobs were really how they should be spending their time.
This resulted in one of the biggest shifts in modern history, with the Labor Department reporting that nearly four million workers in the United States quit their jobs in April 2021 alone. Workers are quitting, with a primary reason being lack of future development. And with the labor market remaining tight, it appears that the departing workers are not returning to the workforce at other companies, but rather dropping out altogether in favor of possibly more risky yet more flexible options like contract work, entrepreneurship, the gig economy, etc.
Employer Response: Increase Retention
The most obvious solution to this issue for employers is to increase employee retention. Address the needs of the employees and they won’t walk out on you, and you can avoid the high costs of turnover. If we know the most common reason people are quitting is due to lack of future development, the best way to keep those employees happy is to meet that need.
Larger companies could potentially readjust their hiring and promotion models to place higher value on advancement rather than external hiring for higher-up positions, but small and medium-sized businesses (SMBs) do not have nearly as much internal professional movement. It’s easy to feel stuck when you’re the office manager of a small dentist’s office. To what promotion could you aspire?
For SMBs and large businesses alike, the most reliable solution to helping employees see opportunity and potential is talent development. Regardless of whether an internal promotion is a possibility, psychology shows us that when people grow skills relevant to their job and/or personal passions, they tend to be more satisfied with their jobs, managers, and responsibilities. The more satisfied they are, the better they perform, and the less likely they are to leave. Higher retention leads to better workforce satisfaction and performance overall, which allows the employer to focus on growth, expansion and success, instead of struggling to fill continuously emptying seats. It’s a win-win!
Wondering what kind of training your employees might benefit from? According to a recent survey from Adecco, 44% of 500 senior US executives said that the American workforce lacks “soft skills” or “talent development” such as communication, creativity, critical thinking and collaboration. Even if your workforce is well-seasoned in the technical or office programs they’re using on a daily basis, soft skills or talent development are often-overlooked opportunities for growth that will not only improve the employee’s job satisfaction, but will also improve the overall culture of your business, as employees take the skills they learn and apply them to interactions with their coworkers, subordinates and management.
If you are looking for training opportunities for your workforce, look no further than Vermont Panurgy’s Learning Center. All of our classes are taught live by real-life, highly-experienced instructors, either virtually or in person. We offer classes in a range of categories, from PC Applications to Technical certification, Graphics & Internet Applications and Talent Development. Take a look at our most recent Class Schedule to find dates and prices, and reach out to us today to get your workforce signed up. Not sure what to sign up for? Give us a call and we can help you find the best learning opportunities for your team.
Never forget, a skilled team is a happy team. See you in class!