According to current economic statistics, the United States is finally edging back towards that elusive condition known as “full employment” – that is, a sustainable unemployment rate of 4% or lower. Job numbers are increasing, the economy is fundamentally stable and sound. As counterintuitive as it may seem, these conditions actually pose significant hazards to many companies, particularly smaller businesses.
Why? A tight labor market provides fewer choices for employers, while increasing opportunities for workers. Employees looking to jump ship have a wider range of potential new employers to choose from; the companies they leave behind are faced with a diminished range of candidates to replace them, as well as the need to invest more time and effort to identify successful recruits.
Some attrition is inevitable, even in the tightest job markets. It is also expensive: Apart from the costs associated with training and onboarding, companies need to consider the hidden costs of diminished productivity during transitions, loss of expertise and institutional knowledge, and the potential impact of churn on employee morale.
When the prospect of easily recruiting replacements dims, employee retention becomes more important than ever; the problem is that many of the most effective strategies are especially costly, and sometimes unavailable, to smaller businesses. While raising pay is one way to get employees to stick around, other retention measures can be just as effective and less expensive, if companies can take advantage of them.
Employees consider a number of factors beyond pay when deciding whether to stay or go – and often, employers can influence a surprising number of them. These can include:
- Benefits packages
- Opportunity for training
- Opportunity for advancement
- Workplace flexibility
- Work/life balance
- Quality of work environment
- Work commensurate with abilities and aptitudes
All are factors in determining the single metric that determines whether an employee sticks with you or not: Job Satisfaction. The higher a worker’s job satisfaction is, the less likely they are to look for greener pastures – and the less likely you are to have to deal with the hassle of finding a replacement.
At Trion Solutions, we consider it an important part of our job to optimize job satisfaction to the greatest degree possible. Over the course of countless engagements, we’ve seen firsthand how providing first-class HR services to rank-and-file employees as well as client firms can have a powerful positive impact on employee morale.
As you might expect, providing a quality benefits package is a big part of that equation: Workers care more about a company that cares about them, and which shows it by making good health coverage, life insurance, 401(k) plans available. But other HR services are also powerful drivers of job satisfaction as well. Improvements to communications, provision of clear and concise employee manuals, professional handling of payroll issues, clearly defined policies and procedures, improved training programs and other improvements to worker-facing HR activities always have a favorable effect on how employees perceive a company – and how loyal they are to it.
Even historically high-turnover industries can benefit greatly from instituting optimized, systematic HR practices and implementing tailored benefit programs – and often they can do it more quickly and effectively by working with a PEO. Rather than a piecemeal rework of an existing system or an effort to develop a truly first-class practice from scratch, engaging a PEO provides a company with the immediate benefits of proven programs and practices that have been optimized elsewhere. While the transition may be generally transparent to employees, the aggregate benefits seldom are. That translates into a clear employee retention advantage in an option-rich job market.
If you haven’t considered job satisfaction in your company lately, maybe you should: There’s only so much top-tier talent around – and any company will do well to hang on to as much of it as possible.
Trion helps companies of all sizes to institute powerful employee retention strategies. To learn more about how we can help you, contact us.