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These Are the 3 Biggest Trends in Workforce Innovation

Keeping up with the changing world requires constant innovation — and this includes hiring. Evolving technology, the shifting generational makeup of the workforce, and a candidate-centric market[...]

February 18, 2020

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Retain Your Margins By Retaining Top Talent

Retaining your top talent should be at the top of your priority list

Since the dawn of the Great Recession in 2008, businesses around the globe found themselves facing the chaos of new challenges, storms many had never weathered before. Six years later, the economic situation improved by measurable degrees, yet many other changes occurred during all that time. As companies focus on rebuilding and forward growth, they are also learning that traditional approaches to recruiting and staffing have become obsolete in the current market. Younger employees are entering the labor force, and they want more career growth, engagement, connectivity and flexibility. The old notions of cubicles and corporate workspaces have not kept up with an environment that now demands remote work and alternative scheduling. Management is struggling to understand, motivate and engage the new breed of talent. And the competition to acquire qualified professionals in an era of ongoing skills shortages – particularly in Science, Technology, Engineering and Math (STEM) -- further complicates the situation.

MSPs and staffing placement partners are enjoying significant growth with the ever-increasing demand for contingent talent, and keeping those proven performers will be critical to maintaining that success. Right now, retention has taken its place as one of the most important topics in conversations about the future of talent.

It’s a job seekers market

According to the most recent MRI Network Recruiter Sentiment Study, a semi-annual report on the employment industry, candidates are now driving the job market. The undeniable theme of the survey is that “despite a commitment to hiring top candidates, many employers are challenged with growing talent shortages due to skill gaps.”

The increase in companies launching hiring initiatives has also spawned a sharp rise in competition for top talent. According to the study, the two primary reasons for unfilled job openings are newly created positions (47 percent) and vacancies from resignations (37 percent).

• MRI discovered that 42 percent of candidates interviewed declined to accept the job offers extended.

• A third of those candidates cited a better offer as the reason.

• Approximately 26 percent of the candidates rejecting offers felt the compensation and benefits weren’t commensurate with their experience and abilities.

• Skilled talent have more options today and more channels for finding work through social networks such as LinkedIn and online marketplaces such as Elance.

However, the most precarious underlying issue comes from retention. Companies are fighting to hang on to top talent – that includes MSPs, staffing partners and client hiring managers. With nearly 40 percent of job vacancies resulting from resignations, it’s clear that retention is a critical dynamic, especially as companies aggressively lure top performers away from their current positions.

Attrition is a two-headed monster

Attrition, in terms of employee turnover, inevitably leads to attrition in the sense of revenues. In some ways, losing an employee is like losing a wallet filled with cash. The Society for Human Resource Management (SHRM) estimates that it costs $3,500.00 to replace one $8.00 per hour employee when all costs are considered. Those costs increase exponentially with the rate of the worker. Keeping superior talent, on the other hand, can yield gains of 50 percent to 125 percent over the course of the engagement.

In the purest calculation, employee turnover costs include:

• Time spent filling the vacancy

• Hours per week lost in productivity

• The time spent, also impacting productivity, to train and orient new talent

• The time needed for administrative and hiring tasks (e.g., advertising, resume screening, interviewing and on-boarding)

However, there are several other, perhaps less obvious, tolls that employee attrition takes on a company. Coworkers, supervisors and managers need to make up for the lost productivity until new talent is prepared to step in and take over. That can lead to overtime and additional shifts, along with the requisite cost increases. Even then, a new worker may need one or two years to reach the level of productivity the former employee exhibited.

Productivity is further sacrificed when existing workers perceive a high rate of turnover; they often disengage. Of course, there also arise cultural concerns as employees question the business environment or the frontline managers.

Customer service issues and other errors may also increase. New employees require time and experience in their new roles to identify and resolve problems. Tenured workers understand the systems, processes and products in place, and have learned how to work in a cohesive team. The learning curve for new talent takes time – and time is money.

Retention strategies

Compensation certainly plays a pivotal role in retaining top talent, yet it’s not the deciding factor. For workers who perform at moderate levels, a bump in pay might be more cosmetic than mission critical, something LinkedIn calls “the hygiene factor – too little money will definitely create high churn, but over compensating people won’t make up for a poor work environment.”

Through MSPs, staffing partners have access to a wide variety of tools and data that can help them expertly assess the skills and capabilities of their talent – performance metrics, attendance, work output, satisfaction and quality. Using this information, MSPs and their staffing partners are better equipped to negotiate competitive compensation structures for talent with demonstrated abilities and results. Rewarding top performers ensures continued loyalty and performance.

Job fit is paramount. Just as there exists an employee value proposition, there also exists a job value proposition – the employment brand. Placing talent in the best-fit environments for their skills, experiences and professional goals creates lasting satisfaction and engagement. As we discussed in our article on employment branding, authenticity is key. The employer brand sells a company to talent:

● What is it like to work here?

● What is the employee culture?

● How are the benefits, perks and work-life balance?

● How supportive is management?

● What are the career paths and advancement opportunities?

Moreover, understanding your client’s employment brand will help you and your staffing partners attract the right talent at an equitable price to every stakeholder invested in the program, including the talent.

Career development matters. With Millennials, it matters a lot. They are motivated by an entrepreneurial spirit. They are more willing than generations past to devote themselves to achieving business goals and innovating new opportunities. They value growth, career advancement and purpose. Their strong emphasis on work-life balance and community also translates to a stellar focus on teamwork, collaboration, acculturation and bonding. Not only do these traits fuel productivity, they inspire morale – also critical to a culture of retention and loyalty.

Communication is everything. The Boomers are leaving the playing field and their replacements, the Millennials, are the social generation. They are highly connected to the world through social networks. Communication is a 24/7 facet of their lives. Listening to this new generation of talent and taking their input to heart is the cornerstone of perpetuating their engagement. It’s not all one-sided, though. In exchange, they expect constructive feedback, professional critiques, advice for improvement and visibility into goals and objectives.

Client hiring managers are swamped trying to navigate the rapid tides of market changes, staffing levels and compliance with established metrics. MSPs and staffing professionals are in unique and advantageous positions to facilitate communication, foster continued engagement and steer top talent to increasingly higher levels of success.

Keep your talent, keep your profits

As LinkedIn perfectly noted, the most successful and enduring organizations are ultimately those in which a common sense of mission and deep respect for talent take center stage. MSPs and staffing professionals have the tools, the acumen, the experience and the skills to fit top talent to highly engaging assignments, carefully selecting the right people for the best clients and positions. By serving as advocates, mentors, facilitators and negotiators, MSPs and their staffing partners can overcome client hiring challenges with professionals who honor their commitments and deliver exceptional results.

For more information on retention strategies and calculating your actual turnover costs, please contact Zenith today.

Sunil Bagai
Sunil Bagai
Sunil is a Silicon Valley entrepreneur, thought leader and influencer who is transforming the way companies think about and acquire talent. Blending vision, technology and business skills honed in the most innovative corporate environments, he has launched a new model for recruitment called Crowdstaffing which is being tapped successfully top global brands. Sunil is passionate about building a company that provides value to the complete staffing ecosystem including clients, candidates and recruiters.
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