The “Great Resignation” is Killing Companies

 

 

In normal times, people quitting jobs in large numbers signals a healthy economy with plentiful jobs. But these are not normal times.

The pandemic led to the worst U.S. recession in history, and millions of people are still out of jobs.

Yet employers are now complaining about acute labor shortages.

Companies run through a basic set of plays during hot job markets.

These often include offering potential recruits more money; give bonuses, promotions, and extra days off to existing workers who get competing offers; and make some sort of commitment to career development for everyone.

 

4 MILLION QUITS NATIONWIDE …

But that hasn’t stopped the so-called Great Resignation of workers saying goodbye to their current job. In each of the last six months, there have been at least 4 million quits nationwide.

The nation had never had more than 2.4 million quits a month since the government started tracking the statistic in 2000.

Companies that are used to losing a few employees a year are seeing turnover rates of 20% or even higher. “It’s killing companies,” says Andrés Tapia, Korn Ferry’s global strategist for diversity, equity, and inclusion.

“The old strategies to attract and
retain workers aren’t working.”

 

GETTING HURT THE WORST ARE …

And yet, it’s small and mid-sized companies that are getting hurt the worst.

These companies have smaller staffs and, in many cases, have less ability to offer higher salaries and benefits. Yet, they must successfully compete for a shrinking base of qualified employees.

What can companies do to retain their current employee base? The answer lies with unconventional thinking.

Can a company offer employees equity if they are not currently doing so? Equity, properly done, can have the impact of employees thinking like owners.

Benefits like additional paid “crisis time” to assist with childcare or other emergencies, working with other employees to adjust schedules, allowing for maximum flexibility.

 

TREAT AS VALUABLE PARTS OF …

In short, treat employees as valuable parts of the company and make certain that your salaries and benefits are up to current industry standards.

The last item above is one that must be addressed across the company. In many companies, long term employees often leave because the salary requirements to hire from the outside have increased to the point where new hire compensation has increased to a par at or above that of longer term employees.

While large increases for employees may not be the norm, in the current market,

… an unfair, unbalanced compensation program is almost certain to create problems among your more experienced people.

 

GROWING & NEED TO HIRE?

If your company is growing and/or you have to hire from the outside, while skills and talent are important, there are other factors that will help make hiring effective.

  • Is the candidate passionate about going to work for you?
  • Did they do pre-interview research to inform themselves about your company?
  • Are they enthusiastic during the interview?
  • Do they illustrate their talent and passion with stories about previous experience?

It’s the answers to these types of questions that help evaluate whether a potential employee wants to work for your organization or is just looking for a job.

Often, you can find employees just by contacting folks you already have relationships with.

Dial up some of your business colleagues or post an update on LinkedIn informing your contacts of your hiring needs.

 

CURRENT STAFF IS A GOLDMINE …

Your current staff represents a goldmine for finding new employees.

Institute a referral program in which team members can earn cash rewards for referring a new hire.

Just make sure you advertise the dollar amount as “after-tax” — there’s nothing worse than employees thinking they just made $1,000 only to find out that a good chunk of it is going to Uncle Sam.

When using social media to find candidates,

LinkedIn should be your first stop.

 

After that, check any potential hires for inappropriate Facebook postings, as well as negative or offensive tweets.

Be sure that you do not factor any protected class information into your hiring decisions (gender, race, religion, age, disability, origin, or pregnancy).

Retaining or hiring during this “Great Resignation” is difficult and requires real creativity.

If you find yourself falling back on the old ways of doing things or on “policy” it may be time to get some help with “out of the box” thinking.

Revitalization Partners Can Help You With That …

Revitalization Partners specializes in improving the operational and financial results of companies and providing hands-on expertise in virtually every circumstance, with a focus on small and mid-market organizations. Whether your requirement is Interim Management, a Business Assessment, Revitalization and Reengineering, a State Receivership or Bankruptcy Support, we focus on giving you the best resolution in the fastest time with the highest possible return.