As inflation continues to soar and the increasing cost of living hits households across the UK, businesses must openly address this situation with their teams if they want to retain top talent.
Some firms are seeking cost-cutting measures in anticipation of another recession. And while at some point, it might be unavoidable to cut back on expenses, you may want to consider doing the opposite when it comes to retaining your top teams. The cost of hiring new staff is typically much higher than the cost of keeping your existing team. A replacement of a salaried employee costs on average 6 to 9 months’ of their wages. This includes the new employee’s salary, training expenditure, recruitment fees, if applicable, and time spent. Expect to pay 20% or more of the employee’s salary to replace them for mid-level position and up to 213% for executive roles. On top of this, there are additional costs of the potential downtime between employees and whilst the new hire becomes competent in their new role.
And if you have tried to recruit recently, you will know that finding talented individuals who share your values, not to mention hold relevant experience and qualifications, is challenging and can take months. In fact, according to Monster, 93% of employers are doing some form of hiring in 2022 (which is up from 83% in 2021), and 80% of those are having difficulty finding the staff they need for their businesses due to skills shortages.
So, where do you begin if you have decided to keep your current team through this rough patch? In this blog, we will go through some tips for retaining the people in your company when the economy is struggling.
As employees are worried about their increased cost of living and potentially long-term job security, they could be more inclined to explore other opportunities (of which there are plenty) and ‘jump ship’. Therefore, it is crucial that you modify your retention strategy to take this into account. Not acknowledging the current situation and keeping communication lines closed isn’t an option. Here are a few ideas for your consideration:
- Acknowledge the “why” 🧐: Many employees quit excellent positions due to unspoken “whys” that could have been simply remedied. Planning your retention strategy can be significantly aided by understanding the reasons why employees have left (or are attempting to leave) your firm. Even though receiving constructive feedback may not be appealing, knowing is half the battle.
- Promote communication 🗣️: Uncertainty and worry are expected during times of crisis. Employees could be concerned about their ability to pay bills, the general state of the economy, their jobs, and potentially the company’s future. Enhancing internal communication will go a long way toward relieving some of these worries and fears.
- Be transparent 💬: Many employees will value their employer’s openness in dealing with them during challenging times. Your team will be more likely to stay with you if you can be open and honest about the actions you’re planning to take and the company’s financial situation.
- Provide flexibility 🕛: The pandemic has taught us how to adapt, particularly in the business world. Giving your team options, such as the ability to work remotely or more flexible working hours, enables them to manage their time better, enhancing their ability to be more productive and in tune with all aspects of their lives. While many of our clients are reporting that their teams are choosing to be in the office during the winter months to keep the cost of heating down in their homes, they still value having flexibility, which is one of the key employability trends according to the Harvard Business Review.
- Offer a competitive salary 📈: You must make sure that your remuneration package is competitive. In some cases, it may mean a pay rise, and although it may seem paradoxical to give raises when many firms are attempting to cut costs, the cost of replacing a team member is far greater than any increase you are likely to offer. That is due to recruitment costs, training costs and the time and effort of everyone involved in the process. Plus, according to research by Monster, compensation is the main factor driving employee career choices, with 50% of respondents saying it was more important than meaningful work (42%) or safe working environment (35%). So, you will need to pay a competitive salary anyway!
- Provide opportunities for training and development 📚: Creating opportunities to upskill continues to be one of the top employability trends and an important aspect for talented individuals who want to continue to grow and develop. Your team will feel more comfortable in their role, valued, and be less likely to look for other work if you can give them options for training and growth.
What to do if you are having trouble retaining employees:
Do you frequently lose staff no matter what you do? If that’s the case, something is wrong. It might be time to look more closely at your company culture if you are having problems keeping your team.
Make sure to regularly:
- Analyse your pay ranges 💷: One of the reasons why your employees are quitting could be that you pay less than the industry standard. See if raising compensation to at least the industry average makes an impact. You can have a look at our free guide that goes over the current job market, challenges, salary ranges and ideas for increasing your chances of hiring great people!
- Examine your benefits plan 🧐: Another reason why your employees may be leaving your company is if your benefits are inadequate. Ensure that your benefits package is competitive and includes items such as flexible working, well-being packages, health insurance or study support.
- Examine your company culture ✍️: Keeping talented individuals can be challenging if your workplace is filled with politics and negativity. Try to foster a supportive workplace where team members feel appreciated and valued. The key here is establishing a culture that unites. For a bit of fun try something unusual, for example, create an interest-based book, knitting, cooking, yoga, or dog and cat appreciation clubs.
Conclusion 😉
Take a step back and consider what you can do if you have problems keeping your employees. Offering competitive pay and benefits, fostering a great work atmosphere, and being adaptable with working hours and location are typically the key factors in improving your situation.
If you are a member of our Master Practitioners Club, here are some of the relevant resources that you have access to:
- How to nurture & maintain a great team with Dominika Sieradzka-MacCuirc
- The grass is greener where you water it: growing & nurturing a top team with Anna Butcher
- Effective Leadership with Dominika Sieradzka-MacCuirc
- Finding great people: Recruitment update
- Effective communication with Emma Browning
- Designing a training program to match your vision with Adam Owen
- Recruitment & Salary Ranges Guide
- My Annual Rewards Statement
- Crazy Team Lady Journal (by Anna Butcher)
- Development & Training Plan
- Designing a training programme to match your vision by NexGen Planners
- Communication Style Self-Assessment
If you are not a member already why not consider joining us now !