Raises Aren’t Enough: Here’s A New Approach To Talent Retention

“Never let a good crisis go to waste.”

When he coined the maxim, Winston Churchill was referring to leveraging the chaos of World War II to conceive the United Nations, but he may as well have been talking about the pandemic and its aftermath. Millions of workers have turned the crisis and its aftereffects into opportunities.

But this is an opportunity for employers, too. The question is: will leaders seize it?

The so-called Great Resignation is top of mind for many employers these days. Employees are quitting at the highest rates ever measured by the Bureau of Labor Statistics. People are switching jobs and even industries at unprecedented rates. Retaining talent has become harder than ever. Employers across the country are suddenly confronted by a reversal in the employer/employee power dynamic that has existed since at least the Great Recession.

No business is immune to the effects of the Great Resignation. A McKinsey survey discovered that 65% of workers who quit jobs in finance and insurance either found work in another industry or dropped out of the traditional workforce altogether. Considering 40% of respondents were at least somewhat likely to leave their job in the next 3-6 months, all managers must acknowledge a cruel reality: Unless something changes, you might lose your talent.

Before we get into the reasons why employees quit and what it would take to retain them, consider this: A separate McKinsey analysis found that 40% of American respondents who had recently quit did not have another job lined up before they left. 

Think about that. Happy people don’t just jump ship. 

How you choose to address the situation is up to you, but the data has some compelling suggestions.

McKinsey’s survey data strongly implies a disconnect between what employees want and what employers think they want. Employers, for instance, greatly underestimate how important it is for employees to feel a sense of belonging in the workplace, overestimate the importance of development opportunities, and severely underestimate the importance of feeling valued by one’s manager. Inadequate compensation is (and always will be) a very compelling reason to seek greener pastures, but respondents put it only slightly higher on the list than not feeling engaged at work as well as having caring and trusting teammates.

While you’d obviously have a hard time retaining talent if your employees suffer from constant financial stress, increasing total compensation is only part of the solution. People need to feel valued.

Are certain managers seeing more turnover in their teams than others? Employees regularly cite bad bosses as the main reason they leave their jobs, so removing bad managers should be one of your first steps.

Do your employees express a desire for remote work, hybrid schedules, or more flexibility in general so they can take care of their families and handle necessary tasks without using their PTO? Adding or improving childcare services, allowing employees to work more flexibly, and expanding other home and family-focused benefits will go a long way toward keeping your best producers in your stable.

Have your employees expressed interest in advancement to roles that aren’t management? Consider giving employees the opportunity to do more advanced work within their skillset. If an employee’s only options for significant raises are to move into a job they don’t want or to hop to another company, can you really be surprised when they turn in their notice?

The old ways of doing business are just that — outdated. Raising wages is a necessary step to retain talent, but so is acknowledging your employees’ human needs for connection, fulfillment, and engaging work with measurable impact.

All of this probably sounds like an extensive overhaul. But just imagine being surrounded by people who take pride in contributing to the long term growth of your business rather than a constant carousel of trainees who leave just as they’re starting to earn their keep. 

The Great Resignation is a crisis. Don’t let it go to waste.