Articles

Impacted by the Great Resignation? Turn it Into the Great Retention

Feb 10, 2022

There has never been a time in history where there has been so much emphasis on compensation, retirement and benefits packages. Turn on the news or open a newspaper and you’ll likely see something about The Big Quit, also known as the Great Resignation, the Great Reshuffle, the Great Reprioritization, the Great Change-Up. It all came about as more people than ever left their jobs as the pandemic-stricken economy began to reopen.
 
According to a January 2022 Department of Labor report,¹ more than 20 million people quit their jobs in the second half of 2021. Resignations were high last summer and fall, but they climbed to a record in November, when more than 4.5 million people left their jobs voluntarily. Now, job openings abound and outpace the number of unemployed, making it an employees’ market.
 
Those who do decide to return to the workforce are more selective and looking for additional perks. Excellent compensation has become just table stakes. Other benefits being dangled in front of select candidates include signing bonuses, retention plans, better retirement matches with immediate vesting, top-notch healthcare, remote and flexible work plans, child care services, tuition reimbursement, loan repayment, and nonqualified executive compensation for executives.

Why are they looking?  

It’s not just unemployed workers seeking new opportunities. According to October 2021 data from the Society for Human Resources Management (SHRM)²,  2 in 5 of currently employed workers had actively began searching for a new job within the previous month.
 
The top reasons cited in that same SHRM survey states that employees are looking for:

  • Better compensation (53%)
  • Better work/life balance (42%)
  • Better benefits (36%)

And of course, there is the vicious circle where all these resignations create more work for those who are left in place, leading to burnout and more resignations.

Turning the Great Resignation into the Great Retention 

It’s imperative that today’s company leaders really understand why people are leaving and know what aspects of the organization’s total rewards package are most valuable to employees. Many organizations are offering higher starting salaries, making counteroffers to those who try to resign, implementing employee referral bonuses, adding more salary adjustments, or doling out spot bonuses to keep employees. Those are all cash compensation-focused retention actions that may offer some short-term success. However, in the long run, your company needs a comprehensive total rewards plan that includes compensation, health and welfare benefits and retirement. 

Not All Retirement Plans Are Created Equal

A retirement plan is an important component of a company’s total rewards package. But there are certain plan resources and features that employees say they want most.

According to a recent Workplace Benefits Report by Bank of America,³ the three resources employees want most are:

  • Access to a financial advisor
  • Information on retirement plans
  • Help developing financial skills and good habits

Offering these resources is a great way for employers to compete for talent.
 
The report also lists the things employees value most when it comes to their retirement plan: matching contributions, as well as eligibility and vesting.
 
Employers should review the company’s retirement plan and look at options to make it more appealing, such as different vesting or match options. In addition, they should consider executive benefit plans. These can provide additional tax-advantaged savings opportunities for executives—and help enhance retention of leadership talent.

 

Financial Wellness Programs

 With the multitude of options out there, it’s no surprise that a 2021 report titled Design of Financial Wellness Programs: What do Employees Want and Whom Do They Trust⁴, found that most respondents look to their employers to bring in financial experts to provide training and education, including the use of employees’ personal financial information to give them advice. Employers that can assist their employees in addressing their financial wellness needs, and in making sound financial decisions, tend to see higher rates of productivity and retention as a result.

 

Here are some other ideas you can start on today:

  • Get proactive: Do “stay interviews” to find out what people want. 
  • Personalize Approaches: Make your employees feel heard, understood, and valued. 
  • Articulate/Update your Employee Value Proposition: This is the “return” that employees get for their hard work and dedication to your company. 
  • Create Career Paths - If you don’t already have clear career advancement opportunities for your people, work on creating custom career plans.
  • Focus on High Potential Employees - Give these workers challenging, exciting assignments so they feel valued and growing.
  • Review your TOTAL REWARDS STRATEGY - Last but certainly not least, (and probably the most important) ensure you have a stance on a package that fits your organization’s size, industry, geography, and competitive landscape while allowing you to RETAIN employees or ATTRACT new ones! 

 

¹Department of Labor, January 2022
²Society for Human Resources Management, October 2021
³September 2021 Workplace Benefits Report, Bank of America
⁴ 2021 Design of Financial Wellness Programs: What Do Employees Want and Whom Do They Trust?, Defined Contribution Institutional Investment Association Retirement Research Center 2021
 
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