7 Ways to Retain Employees in a Tight Labor Market

A Chick-fil-A franchise in Sacramento recently raised its starting hourly rate to $17 per hour from $12 per hour. Wow! While employers in some urban areas in the United States are not seeing the necessity to take such drastic actions, the war for talent is on. Many of my clients continue to tell me getting and keeping good people is their biggest challenge.

Here are some big picture statistics which put our current tight labor market into context:

  • Unemployment Rates – They are the lowest in the United States been since the Korean War

  • Less Births - The 2017 birth rate in the United States was the lowest it has been in 30 years

  • Aging Population -  Baby boomers are retiring faster than younger people are entering the labor force

Labor Shortages Challenge Leadership

It isn’t about just adding or replacing bodies in this tight labor market. An organization’s leadership must also meet the challenge of employee development and engagement after the hire. Leadership often turns to compensation as the single fix. Is it all about money? Does compensation alone make an employer an ‘employer of choice’?

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7 Ways to Achieve Employee Retention that Won’t Break Your Bottomline

Countless research studies indicate there are at least 7 ways to retain employees in a tight labor market, none of which are about cash compensation:

  1. Create a sense of purpose. Employees now, more than ever, want a purpose and reason for working for employers.  It doesn’t matter what your product or service, help employees see the purpose behind what they do.

  2. Build a sense of community. People want a tribe at work. They want to feel they belong and they are seen and cared for as individuals.

  3. Make managers mentors. Train your managers to be leaders who embrace developing their people to their full potential. If your managers can’t enthusiastically embrace developing their folks, should they be managers?

  4. Foster leadership. Develop your leaders to be people who can be trusted and who are accountable to others.

  5. Encourage a culture of truth-telling. Cultures which do not value appropriate sharing of information and organizational reality are low in employee engagement.

  6. Develop leaders who are high in Emotional Intelligence. Leaders high in IQ but low in EQ will never help build great organizations.

  7. Be adaptable. Provide flexible work schedules whenever possible, which is part of recognizing people are balancing many multiple demands away from work.

 Make Employee Retention a Priority

Need help assessing the sweet spot between leadership and compensation planning to find ways to attract new workers while motivating and retaining current employees? By starting with a competitive compensation analysis, you can pre-emptively improve your employee retention rates while building your reputation as an employer of choice. Contact me to start your compensation assessment and strategic planning. 

 

 

Laura Conover