Have you noticed a shift in employees in recent years? Has it been harder to find candidates? Have more people skipped interviews or turned down job offers? Are they getting less work done? Have more of them quit without warning?
If you have, you’re not alone.
The modern labour market has changed
There is a global phenomenon spreading across every continent and industry: employees are dissatisfied, and making it known. Never in history have we seen our current levels of burnout, “quiet quitting,” and turnover; and employees have never been choosier with the work they accept.
The question is: why?
Around 2018, we hit a tipping point in North America, where there were more open jobs than there were job seekers. That flipped back for a brief moment during the pandemic, but has again switched in favour of employees in a big way.
Now, if you’re an employer: you need workers more than they need you. They know it; they’re listening to podcasts about it; they’re talking to their colleagues about it; and they’re seizing control of their careers. They’re redefining what their loyalty is worth and won’t hesitate to leave businesses who are unable or unwilling to cater to their needs.
To put it into context:
- Voluntary turnover has nearly doubled in the past decade (Source)
- 64% of employees are currently considering quitting; 13% do so constantly; 33% are actively looking for a new employer; and 40% admit to having impulsively quit at other points in their career. (Source)
- The average time to replace an employee is 42 days (Source)
- The average cost of replacing an employee can be between 33% and 200% of their annual salary (depending on seniority) (Source)
This prompts important questions for every business owner:
- How many of your employees are at risk of leaving—possibly at the drop of a hat? (It may be up to 25% of your team.)
- How long will it take to replace those employees if they do leave? (It could be months.)
- And how much will that cost your business in:
- Job postings and recruiting costs?
- Overtime and burnout from other employees?
- Lost revenue during labour shortages?
(It will likely be thousands of dollars)
Those questions, while crucial to consider, also ignore the biggest question of all:
Will you even be able to find and keep enough people in the coming years?
In a 2021 survey, 84% of businesses reported facing labour shortages. Everyone needs more people, meaning the war for talent is heating up and can no longer be ignored. If you want to attract and retain employees, you must make new efforts to offer a working experience people will choose over your competitors.
Some good news though: employees’ demands are not unreasonable, nor are they beyond your means—if you plan for them.
Right now, employees are dealing with dramatic shifts, both in lifestyle and finances. Priorities changed with the pandemic, placing a greater emphasis on health and balance. Now, on top of that, inflation has thrown a wrench into peoples’ lives. Most Canadians were already living paycheque to paycheque, and now: 84% are concerned about mounting debt due to the rising cost of gas and groceries, and 40% are cutting their retirement savings to cope.
People just want to take care of themselves and their families. Even if you run a small business, and your resources are already limited: you can provide that support (you have to). When you do, you’ll be set up to win the war for talent, and cultivate a more loyal, engaged, and productive team than ever before.
Invest smarter: what employees really want in 2023
No one’s resources are unlimited, so before you make any decisions on how to provide for employees, get clear on what moves the needle for them. According to recent studies, Canadians have cited the following as some of their top reasons for switching jobs:
- Compensation and benefits
- Career development and opportunities
- Work/life balance
- Managers’ behaviour and capabilities
- Safety and inclusion
Winning the war for talent, then, means outperforming your competitors in these five areas: ease their financial burdens, provide room for growth, empower them to manage their health, and keep them safe and included at work.
(Quick tip: consider including specific references to how you address each of these priorities in your job offers.)
How employees weigh each priority will depend on the industry you’re in, and with each position within your organization. There are no silver bullets to impress everyone; instead, every aspect of HR management, and every dollar invested in people must be looked at with an eye for providing value to employees.
Becoming a top employer—on any budget
The difference between a great employer and an “okay” employer is not how much money they invest in people. Every business—and especially small businesses—already invest a fortune in their employees. The difference is how those investments are used, and how much value they actually create.
Think about your current employee expenses:
- How much do you spend on recruiting and training new hires?
- How much do you spend on WSIB premiums?
- How much have you paid in severance?
- How often are people late or asleep on the job?
- How many Ministry of Labour actions have you received?
- How many on-site accidents have you encountered?
All that money—and the time wrapped up in related issues—are part of your employee investments; they just aren’t creating value for your people or your business. So:
The secret to improving your business is reducing bad employee investments to free up resources for good investments.
That process—which we call Employee Investment Optimization (EIO)—is simple, and possible in every business:
- Control chaotic cost centers and sources of liability
- Improve efficiencies in processes and optimize operations
- Reinvest savings in support, training, and benefits
Each step touches on dozens of HR management activities, from contracts to safety policies to time tracking. While that may seem daunting for those missing a fully-staffed HR department, you don’t have to fix everything at once. The EIO journey begins the moment you get control of just one thing.
The First Step to Attract and Retain Talent
Over the course of one year, you can dramatically improve the number of quality applicants you receive, the frequency of accepted job offers, and the loyalty of your current employees. Step one in the transformation is freeing up time and money you can then use to build momentum.
To find out which cost centre to focus on first, and to gain control of your biggest resource-drainers, schedule a complimentary discovery call with an expert of Employee Investment Optimization.
From there, you can work with your EIO Partner to fix HR processes, reduce the resources you’re currently wasting, and invest in winning the war for talent.
To learn more and to book your discovery call, email firstname.lastname@example.org