The Bureau of Labor Statistics released the December 2018 Jobs Report with results that should prompt employers in health care, manufacturing, and construction industries to focus on employee retention, yet again.
The United States job market added 312,000 jobs in December which was 135,000 more jobs than economists expected. The 177,000 surpluses in predicted jobs added was the highest amount in a month since February 2018. Because the nation’s unemployment rate has been at a 50-year low, employers needed to increase paychecks an additional 3.2% compared to last year to attract employees to those new jobs. Therefore, employers need to focus on employee retention yet again.
When a job market experiences a 50-year low of unemployed citizens and regularly adds available jobs to the market, employers believe they need to raise wages to attract employees away from their current jobs.
Even though organizations believe higher wages will attract employees to their organizations, our 2018 Retention Report proves that higher compensation is not the main driver of employee retention. Sure, higher wages might attract workers, but it does not help retain workers with their current company. Out of all the most common reasons for leaving, compensation & benefits was the fifth most common. It was behind career development opportunities, work-lie balance, manager behavior, and overall well-being.
Do not assume that just throwing more money at employees will help retain them. It simply won’t help.
So, if money is not the main reason employees leave for a different employer, what should organizations who face high employee turnover do to prevent their competitors from poaching their employees away from them?
The first step to reducing employee turnover and increasing retention is to collect feedback from current employees. Ask employees what their intents are this year. Are they planning on leaving? What could the company do to make sure the employee does not leave? Asking employees what they plan to do is the best way to understand and prepare for what could and will happen.
When organizations know the plans and intents of their workforce, they can make the necessary changes to help keep them employed, thus reducing employee turnover. Collecting employee feedback is necessary in this market for organizations who prefer to avoid the high costs of replacing an employee.
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