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Human Resources

Staying for the right reasons

Published 31 July 2022 in Human Resources • 6 min read

Simply spending more on compensation and reward will not ensure employers retain their staff in an intensely competitive labor market.

Europe has an unemployment problem. However, it’s not down to a shortage of jobs; rather, joblessness is today at an all-time low across the eurozone and in other Western countries. There are simply not enough people looking for work.

In this labor market, the last thing any boss wants to hear is that a worker has decided to quit. When the pool of candidates shrinks, the pressure to keep employees stacks up. Conversely, this is exactly the kind of labor market where retention becomes harder as companies strive to turn the heads of their rivals’ best workers.

Over the past 11 months, at least million Americans have resigned from their jobs each month. In Europe, one recent study found 46% of employees were planning to quit their jobs in the next six to 12 months. The “Great Resignation,” as economists have dubbed this post-pandemic trend, is a global phenomenon.

For employers – chief human resources officers (CHROs) in particular – the need for a focused and imaginative staff retention strategy has never been more pressing. 

Pay more, keep more?

The temptation is to make staff an offer they can’t refuse and shower them with goodies to persuade them to stay put. Consulting firm PwC, for example, told 22,000 staff in the UK that they can have Friday afternoons off over the summer months, assuming they get their work done. Investment bank Goldman Sachs has joined a growing list of employers that offer staff unlimited holidays. Pay rises are on the table, too: last month, German supermarket Lidl announced a 12.5% increase in its minimum wage, as well as higher salaries for more senior staff.

Some employers think an even more radical approach is necessary. In the UK, 70 firms, employing 3,300 people between them, have just launched a six-month trial of a four-day working week – their staff will work one day a week less than before but for the same pay, assuming they commit to getting through the same amount of work. Similar pilot schemes have been launched in Ireland, the US, Canada, Australia, and New Zealand.

All this may help in the short term. However, dreaming up new golden handcuffs is no substitute for an organization-wide commitment to employee engagement and retention.

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