The Great Resignation has led to a labor shortage for companies across the country. Millions have already voluntarily left their jobs and, looking forward, 23% of employed Americans plan to resign by November 2022, with the majority of those employees (70%) planning to resign by the end of February 2022.
Businesses who want to thrive during this tight market must up their compensation and benefits game. Here are some strategies to consider:
In addition to labor shortages, inflation, remote work and vaccine mandates are driving extraordinary compensation increases in the market. Accordingly, ensuring your compensation systems are both data driven and market competitive is foundational to attracting and retaining talented employees.
As economic conditions force companies to increase their compensation budgets, in an effort to maximize the impacts, many organizations are mindful of where the dollars are being spent. Specific examples include stay bonuses that are earned by employees who stay with the company for a specified length of time (typically one year) or focusing salary increase dollars on employees who are paid below market and performing at a high level.
In addition, many companies are driving low-cost value via the communications of their total rewards. Reminding employees of the employer’s contribution to their benefits (aka the “hidden paycheck”) has become common and is indeed important. However, forward-thinking companies are also proactively creating a competitive advantage by “selling” candidates on the total value of their rewards package.
- Taking on Increased Costs — Historically, health care cost increases would either trickle down to employees, leading to higher deductibles and out-of-pocket costs, or employers would reduce benefits to avoid increased costs. Businesses are changing this narrative, instead choosing to shoulder increased costs themselves without reducing benefits. In fact, many employers are starting to cover dental and vision coverages. Further, progressive employers are actively looking for ways to lower employee deductibles and out-of-pocket costs.
- Offering Optional Benefits — In today’s fiercely competitive job market, employers realize they must go above and beyond in their benefits offerings to hold on to top employees. Because of this, many have decided to offer additional optional benefits, such as pet insurance and identity theft coverage. These unique offerings are intended not only to increase employee retention but also entice prospective employees.
- Enhancing Employee Assistance Programs — The pandemic has had a serious impact on employee mental health and wellbeing. What makes matters more complex is the stigma that surrounds mental health. Many don’t feel comfortable openly discussing mental health, much less asking for help. Employers are trying to solve this problem by enhancing their Employee Assistance Programs (EAPs) through which employees can access confidential assessments, free counseling, follow-up services and more. Organizations that improve their EAPs, taking into account their workforce’s unique needs, are likely to see increased retention.
Businesses that choose to improve their compensation and benefits are likely to see a significant return on investment in the form of increased retention of their most valuable asset — their people.