JUNE 2019
WHAT’S HAPPENING IN THE WORKFORCE? Turnover and retention are trending topics that dominate today’s workforce as the national unemployment rate dipped to 3.8% during Q1 of 2019. An abundance of open positions with too few job seekers has turned qualified candidates into highly demanded, limited resources, which begs the question: How do I attract and keep the workers I need? In response, we’ve taken steps to identify what motivates employees to leave or remain on their assignments and provide recommendations for not letting the great ones get away!
WHY WORKERS LEAVE AND HOW TO MAKE THEM STAY The average number of hours worked on a voluntarily ended assignment is the lowest it’s been in more than ten years. On average, workers are leaving their assignments after 203 hours. The top 3 reasons provided in their exit interviews are dissatisfaction with compensation, the number of hours worked each week, and their job duties. Workers who leave in the first 80 hours usually leave due to dissatisfaction with their job duties, while workers who leave after the first 80 hours tend to leave for another job with higher pay. Though compensation is the overall leading motivator of voluntary turnover, in Q1 2019, only 6.4% of workers received a pay raise while on assignment. As we examined our 1st quarter data, we saw that periodically increasing a worker's pay rate has a dramatic impact on retention. The average industrial employee works 202 hours before quitting, but workers who receive even a raise outlast their peers and stay on assignment for an average of 454.49 hours—more than twice as long! For each increase, the worker remains on the assignment another 142 days after their pay rate is raised. Small, incremental increases boost morale and encourage retention by reminding employees they are valued and appreciated. In addition to employees who receive a pay increase, employees who enroll in employer-sponsored benefit plans also defy national trends. Employees who enroll in benefits stay 26% longer than employees who do not. A common thought or assertion may be that employees who enroll in benefits have higher wages which boosts retention; however, the average pay of enrolled and unenrolled employees differs by just $0.04 with the average unenrolled employee earning $12.16 per hour and the average enrolled employee earning $12.20 per hour. Knowing that employees who enroll in benefits stay longer than employees who do not enroll emphasizes the importance of communicating what options are available to employees. To encourage enrollment, employers should take measures toward not only offering employees a benefits plan, but educating the employees on what the various options include. Employers should also strive to make enrollment simple and convenient to avoid discouraging the employees from enrolling due to the cumbersome nature of the process.
HOW DO YOU MANAGE FOR EMPLOYEE RETENTION? Returning to our initial question: How do you attract and keep the workers you need? Start with examining your pay and benefit plans and ask yourself these questions: Do you offer small, incremental pay increases to your workers? Do your workers have a clear understanding of the benefits offered by your company? Is enrolling in the benefits your company offers convenient or cumbersome? If the process is cumbersome, how can you make it more convenient? Employees value feeling valued. By implementing a progressive pay plan, offering benefits to your employees, and educating them on the offering, you are reinforcing that you value their contributions enough to invest your resources in retaining them—not to mention lowering the time, funds, and resources spent hiring, training, and replacing your workforce.
CONTACT elwoodthinks@elwoodstaffing.com www.elwoodthinks.com