Retain Employees with Open Communication

Retention seems to be a strong focus for most of my clients. The Great Resignation saw more than 47 million Americans voluntarily quit their job in 2021.  The mass exodus was linked to low pay, lack of career opportunities, shifting priorities, and employee burnout (which is fueling Quiet Quitting)  As a result, Exit Interviews and Stay Interviews have become much more important.  Exit interviews are completed before the employee’s final day after they gave their 2 weeks’ notice.  Stay interviews are with your current employees to assess how they are feeling about the company. Below are a few examples of questions to ask in each type of interview.

Exit Interview Questions:

  • What prompted you to begin searching for another opportunity?
  • Do you feel your manager gave you what you needed to succeed?
  • What did you like best?
  • What did you like least about your job?
  • Do you think your job has changed since you were hired?
  • Did you feel your achievements were recognized throughout your employment?
  • Do you feel you had necessary training to be successful in your role?
  • What can we improve on?
  • Did you share any of the concerns we discussed today with the company or your manager before deciding to leave?

Stay Interview Questions:

  • Which aspects of your job make you eager to come to work each day? Which aspects do you not look forward to?
  • How well do you believe your talents are being utilized? What skills do you possess that you feel aren’t being utilized?
  • What are your career aspirations? How are we doing in helping you accomplish them here?
  • Have you ever thought about leaving the company? If so, what caused you to consider leaving? Why did you decide to stay?
  • What are the biggest challenges you face?
  • Is there anything you’d like to change about your job?
  • Are there things you would like to change about your team or department?

According to Gartner Consulting, the pace of employee turnover is forecasted to be 50-75% higher than companies have experienced previously and the issue is compounded by hiring taking 18% longer than before the pandemic.   You need to evaluate your company and drive strategies that will help keep and attract new employees.

 

To Adjust or Not to Adjust, that is the Question

The labor market might be cooling off “a bit” but people are still in control of their destiny when it comes to switching jobs and considering new opportunities to advance their career or earn more money. According to the Federal Reserve Bank of Atlanta, those who switch jobs have seen annual average earnings increase of 8.5% vs. receiving 5.9% for those who stayed with their current employer. While US employers say they expect the average raise to be 4.1% in 2023, which would be the largest hike in 15 years, according to a survey of more than 1,400 organizations from advisory firm Willis Towers Watson. In 2022, the average increase in compensation due to a job change in the electrical distribution industry was 12.6%. With many employees expecting their company to pay adjustments that fully compensate for the staggering 9.1% cost of living increase in 2022, may be sorely disappointed.

I’ve interviewed hundreds of people in 2022 and only 6% reported any cost-of-living adjustment and only one was paid a retention bonus. Not everyone is money motivated, and you can impose changes that will help you not only attract but retain talent.  A very large percentage of respondents to the WTW survey (69%) said they have increased flexibility for remote work. And nearly 60% are putting more emphasis on increasing diversity, equity, and inclusion. 26% have implemented rewards programs ranging from discounted ‘swag’ at the company store, to all-inclusive vacations for top performers. A one-time hit the P&L can go a long way to retain and attract talent to your organization that will pay dividends well beyond that trip.

If you’re an employer trying to recruit or retain talent, money isn’t the only thing that’s important to jobseekers, but it is a driving force with inflation continuing to rise. Providing high-quality talent, a 10% raise may feel like a lot but considering the cost of turnover and potentially having to pay a new candidate more anyways, 10% doesn’t feel too horrible. Unfortunately, that money may not go too far. The industry’s inability to fill critical roles is not new, but now more than ever, it’s time to consider the net effect of inflation on your employees. If an employee is feeling the pinch, they will look, and for those looking, they will have multiple opportunities and often multiple offers, the traditional counteroffer play to keep your people is failing, so maybe that 10% cost of living adjustment is a lot cheaper than it appears on the surface.

 

+$3,536

Annual increase in pay based on median 12-month change in hourly wages for a full-time, year-round worker.
Source: Federal Reserve Bank of Atlanta Wage Growth Tracker

 

Filling up the tank is costlier +$1,551

Annual increase in household spending on gas based on national average price of $4.87 a gallon on June 6 versus $3.05 a year earlier.
Source: Moody’s Analytics

 

Your new mortgage will cost you more +$4,368

Increase in annual cost of buying a $375,500 home with 20% down and financing the rest with a 30-year, fixed-rate mortgage at an average rate of 5.09%.
Source: Freddie Mac

 

Paying more at the supermarket +$304

Increase in average household spending on grocery food, beverages and non-edible items, such as laundry detergent and paper goods, over the year ending in mid-May.
Source: IRI

 

 

What is the cost of not filling a position?

I’m surprised that when I ask a client (or prospective client) what their cost is to not fill a position, they don’t have a quantifiable response.

Each day that a position goes unfilled, it costs your organization lost revenue and productivity as well as the additional strain on your current employees.

There are ways to calculate the cost per day:

Take the position’s annual salary, divide by 260 working days and multiply by the average days it takes to hire.  So for example, if the base pay is $100,000 and it takes 30 days to fill the role; using this calculation, it will cost your organization $384.61 per day to leave this position vacant which is $11,538.46 in 30 days.  If the position remains open for four months (which we often see by the time we are contracted to start a search), it’s already cost your organization $46,153.20.

You can also calculate your average employee revenue.  Divide your company’s annual revenue by the total number of employees in the organization.  Then multiply by 260 (the average number of working days per year).

You also must consider the other non-monetary costs to an unfilled position:

  • Managing a team with lower numbers (productivity dips).  Both sales numbers and not having enough employees to cover daily tasks
  • Additional workload to remaining team members (lowering productivity and morale)
  • Customer satisfaction diminishes as the service level goes down
  • Lower customer confidence – Loss of skills and expertise on your team
  • Loss of leadership, idea generation, skill development
  • Perception to the industry – why are these roles open?  What is not working well in your organization

The cost of leaving a role unfilled in your organization is tremendous.  And candidly far greater than the investment in partnering with a professional recruiter.  Yes, the cost of using a recruiter is high but Egret Consulting finds industry specific talent (result – less internal training).  The process is much faster than posting on job boards…Egret Consulting’s average is 23 days to fill a position.  This is far less than the cost of having your position sit vacant.

 

 

Make Offers That Get Accepted and Retain Employees

You’ve interviewed candidates and narrowed it down to the one!  What are the next steps?

  • Move Fast – Candidates have many opportunities coming to them in this market.
  • Review your salaries based on today’s market. Your recruiter should have some insights into what the current market pay is in your industry.  Think outside the box with sign on bonuses and more job flexibility (in office vs remote or hybrid).  Make sure your current benefit packages are in line with your competition.
  • Make a verbal job offer first, either over the phone, in-person or via video conference. They need to hear your excitement and you’ll be able to hear how they react.  Include all the details: job title, start date, compensation, bonus structure, pay frequency and date which they must accept or decline the offer. Listen intently to how they react and address any signs of hesitation.
  • Apply the 10% rule (this may be higher now given the market). If you’ve done your homework and asked the candidate during the interview what they need to make a move, then you should know what salary will be accepted.  Generally speaking, candidates are expecting a minimum 10% raise when they change jobs.
  • Explain pay and benefits as clearly and thoroughly as possible. If you don’t know all the benefits and details, connect them with someone in your company who can answer all their questions asap.
  • Ask – I understand you will need some time to review, but can I ask what you think about our offer? Any hesitation from the candidates indicates they may have some concerns and there is a potential the offer will be declined.  Ask them why they hesitated and given them time to talk through their concerns.
  • Follow up with a written offer. Give them a clear deadline to respond, 2 business days is typical.  Remember this is like a marriage proposal, if someone asks you to marry them, and you say, ‘well give me about 2 weeks to decide and I will get back to you.’   That does not go well in love or in job changes.

Retention

69% of workers are more likely to remain with a company for 3 years or more after a positive onboarding experience.

  • First ask your current employees why they stay and what they liked or didn’t like about their own onboarding process. Use that information to refine your interviewing and onboarding program and solidify your company’s culture.
  • Encourage and establish formal or informal mentorships to connect new employees with senior leaders. (Include your current employees and include them in this potential program)
  • Focus on milestones with your new employees and acknowledge that they are met in the way the employee likes to be acknowledged. What are the 60 – 90 day goals for the position and then what are the 6th month and annual plans? Do a deep dive at these reviews to look at their career goals and/or life goals.
  • Open communication- Ask for employee’s opinions and then acknowledge and utilize that feedback.
  • Employees who work for companies who value them and make the work meaningful, stay longer with their companies.
  • Celebrate the wins and host regular status meetings to help address the process and progress
  • When someone leaves, do an exit interview. Use that information to help see if there is a need for change in the company

 

 

 

 

 

 

 

 

 

 

A Genuine Story of Success

We never know when or where a source of inspiration will come from.  Most share an eagerness to learn and grow, both personally and professionally.  Often that growth comes from a shared story, sometimes so compelling that it serves as motivation and encouragement causing us to reflect and appreciate the situation.

Recently I was speaking with a recruited candidate.  As we dug deeply into her background, she shared a remarkable story that I’d like to reshare.

When she was 16 years old, she was placed into child protective services.  She aged out at 19 and was homeless.  She literally started at the bottom.  She was on welfare and had nothing.  She began working at a photo lab making $8/hr.  She then went to work for a grocery store overnight for much lower pay and fewer hours to start.  She had no money for food.  For three months she walked nearly three miles to a church for food handouts as welfare would not give her food stamps.  She made the decision that she was not going to accept this path.  She enrolled in a highly respected college to pursue an EE degree.  During her time at college, professors and advisors told her to quit. They literally told her that she’d never make it.  She was determined to prove them wrong.  She ignored all the negativity and persevered.   Her academic journey took her 8 years to earn her degree.  She won!   But another journey, as with all college graduates, began.  After graduation, she accepted a role at an industry leading power distribution manufacturer.  She had no internship experience because of the work schedule required to keep paying for her education and living expenses.  Despite having no exposure of any kind to power distribution manufacturing, she jumped in the deep end and learned.  She grew every day on the job.  She was given a chance and she flourished.  She grew into the subject matter expert that she is today.

This is a story of grit and conviction.  The courage to not let others determine your path.  To take full ownership of your situation and never give up.  Against tremendous odds, this person succeeded!

We all have situations that can consume us negatively.  We can choose which path to take.  We control success or failure.

This person inspires me to choose success.