Employee Retention is a Growing Concern as Northern Nevada’s Economy Improves
by Melissa Marsh, SPHR, SHRM-SCP
There is good news for Nevada business owners. The economy is improving. More jobs are coming available. Economic development is a major initiative in Northern Nevada. And, unemployment levels are dropping.
The unemployment rate throughout the state of Nevada was 6.7 percent for September 2015—unemployment has not been this low since July 2008! This is a seven-year low, and it’s trending about a point lower in Northern Nevada.
Meanwhile, the number of employers in the area continues to grow.
How Lower Unemployment and More Jobs Impact Local Employers
The combination of a lower unemployment rate and increased number of jobs means employers now need to focus on retaining employees. As opportunities abound, employees are enticed to leave. High turnover rates aren’t good for business. It is estimated that one employee turning over can cost a company close to $50,000 in the form of recruiting, training, and lost productivity costs.
Why Do Employees Leave a Job?
A Gallup poll on employee engagement released earlier this year points to an employee’s immediate boss as a key factor in employee retention. It cites “a Gallup study of 7,272 [in which] U.S. adults revealed that one in two had left their job to get away from their manager to improve their overall life at some point in their career.”
Another important reason that employees leave is for greater pay. According to the Society for Human Resources Management, 60 percent of employees indicate that compensation is very important to their job satisfaction. Pay takes the lead when the economy is strong and the getting’s good.
What Can Be Done to Retain Employees?
To adequately plan for Nevada’s 2.5- to 3-percent projected annual growth (forecast by Brian Bonnefant of The Center for Regional Studies at the University of Nevada, Reno in a Nevada Business magazine article), employee pay and ancillary benefits will likely need to increase for your company to remain competitive. Consider payroll increases of 6 percent to cover cost-of-living and merit increases, and to keep your pay scale up-to-speed with employee pay trends.
So, raising pay rates must be done, but what else can employers do to contribute to employee retention?
Begin to gather information about what your employees want so that decisions can be made to enhance the environment to be as desirable as possible. Some of these improvements can easily be accomplished and are employee boosters you may not think about unless you ask.
Every employee is different. There is an essential need to communicate with and engage employees in the process of determining the right offerings. Ask employees what they value at work. Give your employees a list and ask them to rank what is most valuable to them; then talk to them about their rankings. This list should, in part, consist of actionable items that the company can provide to employees. Some ideas include transparent communication (ask what they want to know), how they want to be recognized, learning/development to further their careers, advancement opportunities, comfort during work hours, bonus rewards, benefits, and relationships with managers, coworkers, and customers.
Would ergonomic changes be desirable? Does providing snacks and beverages make a difference? Or offering more flexible work hours? Perhaps, you can beef up benefits coverage or add new benefits that appeal to your employees? However, don’t assume to know what is appealing. Ask your employees.
There are so many considerations; but start incrementally. Be sure your compensation changes fit government regulations and update your company policy and handbook to cover relevant changes. Remember, as the number of employees in your company changes, regulations for your company can change, as well. It’s also important to ensure that any new benefits or perks are sustainable long term – taking away benefits or pay can be devastating to employee morale.
Let Go of Non-Producing Employees
This is the time to dismiss employees who don’t contribute to your company’s success. Let them leave for an extra dollar an hour…it’s good for the company and it’s even better for the employee to find the best suited workplace.
Make a plan and determine who should be on your team to maximize your growth during this exciting time of explosive economic development. Take steps now to be ready for the continued changes that Reno and all of Northern Nevada will continue to experience. Expect more employers and more jobs available than we have seen in years. Now is the time to start planning how to retain your superstar employees.
Find out what it will take to keep your employees happy in a healthy and growing work place. Ask questions, open dialogue, and don’t assume you know what makes your employees tick.
Melissa Marsh, SPHR, SHRM-SCP, is a human resources consultant and founder of HRinDemand, a human resources company in Reno, NV, offering expert guidance and easy-to-use tools to help small businesses with employment regulations, compliance, employee relations, and company growth.