In the wake of the pandemic, the global economic climate has teetered on instability. Chronic supply chain disruptions, inflation rates, labor shortages, localized shutdowns, and cross-border conflicts have all reshaped the business landscape. As global uncertainty escalates and consumers cut back, a recession looms, potentially lasting between two to five years or even longer.
For HR professionals, innovatively and methodically attracting and retaining top talent becomes paramount, especially as prolonged economic unpredictability leaves employees anxious about job security. Consequently, engagement and retention strategies are under scrutiny.
The Challenge of Retention in Today’s Economy
The prevailing economic conditions have placed businesses in precarious situations. Inflation has eroded the purchasing power of employees’ wages, leading to increased financial stress. Consequently, individuals are seeking higher compensation and support, with their expectations amplified by the challenges of the past three years.
However, companies grappling with lower-than-expected revenues leading to budget cuts or layoffs, find offering substantial salaries increasingly unfeasible.
Despite layoffs, the demand for top talent and experienced professionals remains high, making candidates who can seamlessly integrate into their new roles without requiring additional training or a ramp-up period particularly valuable.
Workhuman’s 2022 Human Workplace Index(1) revealed that one-third of U.S. workers would not make any financial concessions to maintain their employment during a recession. This places organizations in a predicament when it comes to retaining skilled staff members or recruiting prospective hires.
5 Best Practices to Retain Top Talent in 2024
There are tangible steps organizations can take today to ensure that their best workers do not leave the company, even create an employer reputation that attracts more like them. In addition to the right strategy and processes, insights from people analytics could play an important role in these decisions.
Optimize compensation plans and salary packages
In the context of the economy, staff’ “wish lists” for employment are being modified to reflect their new compensation expectations. In recent years, people looked for employment with a greater focus on well-being and organizational culture or goals that aligned more closely with their own beliefs. And now, compensation is in the spotlight.
The top two reasons why individuals think about leaving their jobs, according to research(2), are higher pay elsewhere (33%) and no salary hikes at their present employer (27%). It is obvious that the current state of the global economy has triggered a readjustment in employee attitudes, including their perspectives on compensation and opportunities for progression.
HR professionals can respond by utilizing pay analytics and equity software. These HR technology solutions help benchmark pay expectations and align them with the company’s resources. You’ll also be able to find and correct any wage gap, making sure you are able to hire and retain diverse talent from different demographics.
HR analytics is another way to create annual compensation statements, which offer employees a detailed breakdown of their overall compensation and aggregate benefits for the year. Bear in mind that workers don’t always recognize the value of the organization’s offerings. During hard times, analytics serves as a gentle reminder of the resources you’re spending on them.
Establish transparent communication with employees
It is important to be straightforward and open with all employees regarding organizational decisions. Honesty, especially during turbulent periods, can foster trust and mitigate reputational damage over time. Moreover, unambiguous communication might improve employee morale by alleviating certain aspects of the obvious uncertainties they will experience. HR teams can:
- Set up a clear channel for communication across management and the workforce.
- Be consistent with the regularity of your feedback and disclosures of vital information.
- Provide a succinct and precise justification for any amendments.
- Articulate why you are unwilling to disclose specific information.
- Request comments and proposals regarding adjustments or challenges.
Analytics will tell you which communication channels employees will engage with the most – are your newsletters getting enough open rates? Are enough people participating in the Slack channel? What’s the general mood of the workforce as per feedback analysis? HR data will give you the answers you need about effective and transparent communication during tough times.
Optimize the benefits package
One of the most common modifications during a recession is the reduction or discontinuation of employee benefits. This can cause employee dissatisfaction and drive some to look for other opportunities.
Use this as an opportunity to gather feedback from employees on which benefits truly matter to them and use analytics to identify trends. For instance, some staff members might pick cash over reduced benefits spending. Others may prefer to substitute childcare for the unlimited refreshments.
Using analytics, HR leaders have to find out which perks make the most budgetary sense while safeguarding the competitive advantage in attracting and retaining talented employees. A recession can result in a downgraded program in contrast to what was on offer previously, but that’s acceptable. What you give is always more important than how much you can offer.
Reduce workloads through automation
In the event of a staffing shortage or recruiting freeze, overloading your current workforce may lead to employee fatigue and high attrition.
Instead of weighing down your staff members with added responsibilities, support them in automating and streamlining current processes. This is especially true in HR and accounting divisions, where employees are overburdened with repetitive documentation and compliance considerations.
The digitization of certain aspects of everyday tasks, initial orientation, and worker records administration may free up time for people to zero in on higher-level tasks or work-life balance.
Also, staff self-service options, like letting employees organize their PTO days on a digital calendar or offering feedback, help everyone. It not only reduces workloads for HR teams but also allows individuals to complete them on their own time, which makes their lives just a little bit easier during a difficult time.
You can rely on a tool called process mapping and analytics to serve as the foundation for automation initiatives. These reveal exactly how your business processes work and are interrelated, so you can find duplications, inefficiencies, and instances of overwork.
Offer opportunities to upskilling
It’s essential to look after staff members as enthusiastically as the hunt for external talent — particularly given that your staff members are now looking for opportunities for growth and development within their organization. By investing in skill development over the course of a possible recession, the organization can demonstrate its long-term commitment to the workforce.
Offer training and internal advancement prospects laying out the career path of every worker. Utilize learning analytics along with data-driven career development platforms to better understand various learning needs and how they correspond with your organization’s strategic objectives.
Final Thought: Combine Data with Authenticity
Regardless of the strategy chosen to retain top talent during a recession, genuine intent in its implementation is vital. Employees can find payment anywhere they go, but organizations must be conscious of both their larger mission and broader goals and culture to make the right strategic decisions for their workforce.
Data analytics can then be used to reaffirm the values central to your organizational culture, finding the perfect synergy between ethical, humane decisions and the most logical choice.