Good workers are hard to keep. U.S. unemployment rates were remarkably low in 2018. While that is good news for workers, it’s potentially challenging for companies trying to retain their top talent for the long haul.
Competition is fierce. Employees are no longer staying in one spot for years—even decades—just because they earn a decent salary, like what they do, and are comfortable where they are.
Perhaps more than ever, experts say, companies across the country—including those in Omaha—are realizing how imperative employee retention has become in today’s strong job market.
“There’s no loyalty,” says Spencer Brookstein, president of Brookstein and Associates Executive Recruiters. “You don’t go to work for somebody in your 20s and stay there forever. Those days are gone.”
But was this simply a romantic ideal? A 2014 study titled “What Should I Be When I Grow Up? Occupations and Unemployment Over the Life Cycle” notes that, “Young workers enter the labor market not knowing the occupation that they are the most productive in.” This study goes on to note that those younger workers who are most desired traditionally have the highest rates of mobility.
This past summer, the Labor Department released its April 2018 snapshot of the economy, showing the unemployment rate at 3.9 percent, the lowest it’s been since 2000. At the same time, a younger, tech-savvy workforce continues to emerge, bringing with it a new generation of employees who are demanding more than average salaries, two-week vacations, health care, and retirement benefits.
Because of that, Brookstein says, companies are trying to find creative ways to keep their current employees happy.
“With compensation you’ve got salary,” Brookstein says. “Salary is important, but there’s also benefits, especially medical benefits, and perks. Does the company offer discounts to places in town, gym memberships, an extra week of vacation, or special recognition for something done right?”
Union Pacific, according to a company report, offers child care both in-home and on campus for employees, pet care, tutoring and homework help for employees’ children, elderly care, and housekeeping.
U.P. “draws thriving talent, energizes current employees, and develops them to carry out our mission while leading the transportation industry into the future. Key engagement initiatives revolve around our culture, workplace relationships, employee rewards, job responsibilities, and personal growth opportunities,” the report says.
All Makes, which celebrated their 100th anniversary in 2018, has seen an increase in office-furniture business as younger workers desire open-concept offices, which, interestingly, were popular in the 1960s.
“When it comes to recruiting and retaining talent, pay and benefits play a major role, but so does the work environment, i.e., the furniture and workspaces available,” says Amee Zetzman, All-Makes CFO. “Due to the Great Recession and explosion of the ‘gig economy,’ young adults expect remote, flexible, and collaborative workspaces—similar to what they experienced in college.”
While environment and culture mean a lot to younger employees, how do employers turn these values into their value of retention?
Zetzman says that having employees with passion and treating employees with compassion is a strategy that has helped this century-old company retain a great staff.
“We have people that have been at All Makes for more than 45 years, and that’s inspired by their passion for their jobs and loyalty to the company,” Zetzman says. “We strive to treat our employees like family and encourage honesty and open communication. Our office doors are never closed and we encourage people to come to us directly with issues as well as solutions.”
“We also make it a priority to give back to the community, and our employees follow that lead,” says All-Makes CEO Jeff Kavich. “We listen to all requests regardless of size or scope, and take suggestions from our employees for what is important to them. Our team members’ personal circumstances influence our giving.”
Brookstein says that while employees leave jobs, they tend to stay in the same industry they start out in, whether that’s accounting, law, medicine, real estate, or another field.
To retain employees, Brookstein says companies should look at what he called “two sides of the coin.”
First, career growth.
“If you look at it from the employee point of view, you’re looking to see if your current company is offering you growth and not stagnation,” Brookstein says. “You’ve heard of the five- or 10-year plan? I say, look at two or three. Does the employee see themselves doing the same job, working for the same boss, the same responsibilities two or three years down the road with no growth possibilities? Probably not.”
“I’m not talking about people leaving for a dollar more an hour or whatever,” Brookstein says. “Nobody’s going to make a switch for that, but they will for more.”
Brookstein continues: “So how do I keep people happy at my company? Pay them above market rate. A company paying 10 percent or more above market rate is going to see their employees staying with them longer.”
Another factor is lower and middle managers. While most people want to do work they love, having a positive relationship with a direct manager can make a world of difference.
While higher salary and better benefits may cost a company some money, turnover is more expensive, Brookstein says.
“Hiring and training costs are exorbitant,” he says. “If you won’t pay someone an extra $5,000 a year it’s going to cost $20,000 to hire someone new and train them. If your employees leave, you’re going to pay many times over what you could have paid them to stay.”
Visit brooksteinrecruiters.com for more information.
This article was printed in the February/March 2019 edition of B2B. To receive the magazine, click here to subscribe.