Bucking the latest labor threats

Posted on Oct 12, 2022 in Featured, Features

The U.S. labor market remains tight, in spite of recent changes. The Bureau of Labor Statistics reported approximately 4.2 million workers quit their jobs in August 2022, unchanged from July 2022 and down just slightly from 4.3 million in June. You may have heard of the Great Resignation of older employees that are fueling the fires. But there’s more. Other trends — including “quiet quitting” and “echo quits” — are being cited as significant factors.

Your business doesn’t have to succumb to the malaise. By taking proactive measures to retain top-quality workers and targeting new hires, you can keep the operation humming on all cylinders.

Quiet Quitting Can Be Noisy

The term quiet quitting, which purportedly originated on TikTok, is a misnomer in that employees aren’t actually “quitting.” Instead, they’re staying on the job, but slowing down. Although the exact definition remains somewhat vague, essentially employees aren’t working as hard as they did before, or at least not as hard as their employers expect them to.

This trend doesn’t mean that people are giving up on working altogether because most people can’t afford to not work. It more aptly reflects differing views of the company and its employees.

For the last few decades, typical workplace culture has embraced those who were ready, willing, and able to go the extra mile on behalf of their employer, regardless of the consequences to their personal lives. But the number of workers burning the midnight oil, or simply getting burned out, is trending down.

The point isn’t to give less to their employers. It’s mostly about finding a better balance between work and personal life so that Little League games and dance recitals aren’t sacrificed due to work-related commitments. As frustrating as that might be for employers, it’s a new reality. Smart employers will try to listen and learn from the quiet quitters.

Echo Quits: Quit and Quit Again

Sometimes employees quit a job and latch on somewhere else, only to quit again shortly thereafter. This phenomenon, known as “echo quits” or an “echo boom in quits,” has accompanied the Great Resignation. Like quiet quitting, it’s compelling employers to rethink the way they operate.

Of course, leaving one job for another isn’t a guarantee of a good match. These days, workers aren’t inclined to stay put and will keep seeking greener pastures, even within a year of taking the job. Going back to the Bureau of Labor Statistics for August 2022, 2.7% of the workforce quit. During the same period job openings plummeted by about 10% (to 10.1 million, down from 11.2 million in July 2022). The biggest drops occurred in health care and social sciences, other services, and retail trade, in that order. The drop in job openings wasn’t entirely unexpected, because as the quit rate rises, job openings typically increase.

In recent months, workers have had more leverage than employers had and to some extent, still do.  If employees quit and don’t like the first job they take, they can simply leave and find another one. In a tight job market, employers who need to fill positions don’t have the luxury of holding job-hopping against otherwise good candidates. However, if job openings continue to decrease, that balance of power might shift.

Echo quits have also led to another trend called “boomeranging.” As the name implies, workers are returning to the employer they initially left, without any hard feelings on the company’s part. In fact, boomeranging often results in a hefty salary boost and other concessions.

What about employers who don’t have workers boomeranging back to them? It may be time to explore other ways to hold onto good workers.

7 Strategies for Retaining Employees

There are numerous ways an employer can limit the mass departure of employees. Here are seven practical suggestions.

1. Up the ante. Money still talks. Of course, it may not be possible to pay employees what they think they’re worth, but you can narrow the gap that currently exists. Also, compensation isn’t just about salary and bonuses. You may be able to spruce up your fringe benefit options at a reasonable cost to the company. For example, a cafeteria plan offers employees a menu of benefits to choose from, but the company pays only for the benefits it provides.
2. Be flexible. The pandemic has shown many employers that they can survive and even thrive when employees work from home. Consider offering flexible work schedules and reducing commuting hassles for employees who don’t have to be on-site. This can provide employees with their desired work-life balance and discourage quiet quitting.
3. Provide new challenges. No one wants to stay in a rut. To avoid lethargy, emphasize an employee’s strengths by creating new challenges. For instance, ask an innovative employee to work on new product development. This may require transferring the worker to a different department or group.
4. Sharpen job skills. An employer can offer training sessions that enhance an employee’s work skills and/or teach them new ones. Critics might say you’re setting up employees who will learn the tricks of the trade and then move somewhere else. That’s always possible, but don’t let it stop you. You’ll benefit from the enhancements in the interim. Plus, the employee may be inclined to stay in the fold.
5. Communicate. How do you know what employees want if you don’t ask them? Don’t wait until an exit interview to ask this question. Use a confidential survey and be open to new ways of doing things. On the flip side, let employees know what’s expected of them. It may be beneficial to spell out guidelines in writing and discuss them periodically with the staff.
6. Recognize top performers. Quiet quitters may feel they aren’t recognized for their hard work. Show employees that you care by noting achievements in the company newsletter or posting them on your website. Even better: Combine recognition with financial rewards for doing an extraordinary job. Keep employees motivated to maintain high-performance levels at work.
7. Lighten the load. Be more mindful of pushing employees to their breaking points. It may be difficult to lower your expectations, but it’s important to acknowledge that employees have lives outside of the workplace. Consider allowing employees that you count on heavily to job share, which could provide backup support for key jobs. And be more understanding of their need for days off and flex time.

However you choose to address the tendency of workers to leave jobs these days, don’t just focus on your existing staff. The ideas you employ to keep good staff can also be part of your recruitment campaign for new hires.

Final Thoughts

It’s a new world of work, and to some extent, employees have been in the driver’s seat. The ideas above are just a starting point; there are many other ways to help keep good workers on board and attract new ones in any labor market. The main thing is to be proactive. Don’t wait for quiet quitting or echo quits to disrupt your operation. Make your moves first.

About the Author:

Steve Pierson is responsible for coordinating tax services for many of our manufacturing, distribution, and service clients at Selden Fox. With more than 30 years of experience as a tax professional in public accounting, including 11 years as a partner with a national public accounting firm, Steve provides clients with a wide array of technical accounting, tax, financial, estate and succession planning, employee benefits, and international tax planning expertise, as well as merger and acquisition transaction guidance.