Time to Ramp up Retention
We've noticed several trends that indicate now is a good time to ramp up employee retention efforts, if you haven't already. Wage increases are beginning to accelerate and seem likely to continue to do so. Many large employers like Target, Walmart and McDonald's have increased their starting hourly wage to well above the required minimum wage. This seems more in response to the business need of attracting and retaining associates than in response to political and regulatory pressures. Compensation increases for private company workers across the country increased 2.8% for the 12 months ended March 2015, a substantial increase from the same period last year.. The number of new jobs created also continues to increase and the "quit" rate continues to creep up. In addition, the labor participation rate remains at a historically low level which will be compounded by the continued future retirement of the baby boomers. All this means talent will be in increasing demand, there will be more turnover and it will be more difficult to hire. The shortage of skilled manufacturing workers has been widely reported and we're seeing it in professional services, information technology and engineering. Additional areas seem likely to emerge in the coming years. Accordingly, employee retention is and will be increasingly important as a critical business practice. Here are a couple of items to focus on: • Employee engagement. Many surveys indicate that millennials (a growing percentage of today's work force) value engagement, being aligned with the organization's goals and values, as one of the most important factors in job satisfaction. Making sure employees understand the connection between their work and organizational strategy and also the importance of their job to overall organization success are good places to start addressing this. • Employee development. Employees want training, mentoring and coaching and they want to gain skills. They also want to see a path to meaningful growth in responsibility and compensation if they continue to be a high performer. Taking the time to work with them in the short term will pay off in the long term.
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