According to BLS data and a recent survey by Challenger, Gray & Christmas, Inc., employers are struggling with a double-whammy of record high quit rates and fewer applicants for job vacancies. The problem is most acute for employers seeking employees for in-person work; remote working is highly preferred by many job seekers. Employers would be wise to acknowledge that, per Andrew Challenger, Senior Vice President, “With job seeker confidence at an all-time high, workers are really calling the shots.”
Given these conditions, employers would be well-served to ask, “Why would anyone work here? Why would anyone choose our workplace over others? Why would anyone choose to stay working here?”
Workforce stability is generally considered desirable as a means to limit brain drain, enhance succession planning, and reduce the costs related to recruiting and onboarding. Assuming workforce stability is desirable, not having clear, compelling answers that align with current expectations could lead to continued workforce frustrations and eroded bench strength in a competitive labor marketplace.
A competing perspective comes from Amazon, where leadership is allegedly comfortable with warehouse workforce attrition rates at 150%, despite pay and benefits packages that exceed industry averages. According to a report from the New York Times, Amazon’s business model is built on the assumption that high turnover eliminates an entrenched workforce who grows disgruntled and ceases to be productive, innovative, and is more likely to unionize. In addition, huge investments in automation, robots, and AI are intended to minimize and replace human labor as much as possible; this includes HR functions that leverages self-serve and automated onboarding technologies. Amazon’s model suggests that high turnover costs (recruiting/ onboarding/ training/ termination) are preferable to workforce stability that leads to stagnation. Whether this business model is sustainable in a tight labor market with evolving employee expectations remains to be seen; Amazon is reportedly revisiting this model.
For employers who value workplace stability and seek to reduce turnover and enhance retention, it is important to understand what job seekers want and what is driving the turnover wave of incumbent workers. According to various surveys, passive and active job seekers alike seek workplaces with a blend of these characteristics:
Liveable wages and competitive pay. As previously mentioned, Amazon’s warehouse workers’ pay leads the industry; yet pay alone is not enough to encourage retention.
The pandemic underscored the importance of health and leave benefits. Employees are also seeking work-life balance benefits and remote working options. Training and career growth opportunities are in high demand. Holistic Wellness benefits are valued – physical, emotional, financial; employees desire a range of employer benefits that help with all aspects of their lives.
A workplace culture that promotes a community of meaningful inclusion, respect for diversity, and that actively builds relationships among employees is valued. Amazon warehouse workplaces tend to isolate individual employees, and the pace of work is an obstacle to employees connecting and building relationships. This may contribute to the lack of workforce loyalty and high turnover.
The pandemic is not over; employees will not tolerate workplaces that lack adequate safety protocols. Employers must show they value employee safety by taking all reasonable measures to create and maintain safe workplaces. This includes allowing and fully supporting remote work when possible. Psychological safety is also in demand; employees want a workplace where they can be their authentic selves and speak out when they see something wrong or in need of attention by Leadership. This may be related to employer practices, policy or behaviors that appear harmful to individuals, communities, or the environment.
To figure out why job seekers and incumbent workers should choose your workplace over others, take these action steps:
Ask employees and job seekers alike about pay, benefits, culture, and safety. Listen attentively to identify their needs, individual concerns, and preferences. Ask for help from Employers Council with developing a strategy to become an employer of choice; our team of Organizational Development and HR professionals can help.
Take timely action on the feedback. Asking and ignoring is worse than not asking at all. Employers may need to consider bold new ideas and make unprecedented decisions that break traditional boundaries. Experimentation is risky and does not guarantee success; it also may be the only way forward in a time where previous ways of doing business are no longer effective.
Go beyond passively announcing new processes, benefits, etc., that address employee requests; actively assist employees in accessing and benefitting from those opportunities. Passive methods (self-serve portals, emails, newsletters) must not be relied upon to inform employees; include individualized assistance to powerfully demonstrate that each employee is valued. This may require novel approaches, such as training supervisors to educate their teams to connect with the workplace supports that matter the most to them. Assist job-seekers with accessing the information they need to decide where they choose to land. Poor recruiting practices harm an employer’s reputation and talent acquisition outcomes in a competitive labor market; for example, avoid long response times during the screening process, disorganized interview sessions by untrained staff, and ghosting applicants after multiple interviews.
Why would anyone work for you? For many employers, the response must go beyond “For a paycheck.” For assistance with developing a more effective strategic approach to this challenge, reach out to Employers Council.