Retention—it’s a word that’s keeping most HR and business leaders up at night.
And it’s no wonder: Last year, 47 million American workers left their jobs in a record turnover tsunami dubbed by many as the Great Resignation. The trend has set employers up for a major retention headache: A recent study by Paycor found that more than three-quarters of business leaders surveyed said their attrition numbers have jumped in the last year, and almost as many reported that a lack of talent was putting their business at risk.
While experts predict the exodus may be showing signs of slowing in the coming months, that hasn’t stopped employers from continuing to scramble to figure out how to hang onto their top talent. As organizations head into the second half of this year, they’re starting to look ahead to how these trends will play out in 2023. So, what’s to come for retention?
Wages will continue to rise
The Paycor research found that employers are increasingly relying on compensation as a driver of retention, and will continue to do so into 2023. Salary increases were actually the top retention strategy cited by half of those surveyed. Along with offering more money, employers are also getting on board with better, higher-value benefits, including more robust retirement plans and paid leave. Taken as a whole, it’s clear that employers are willing to put their money where their mouth is to get their standout talent to stay on board.
Culture is king
In addition to polling business leaders, Paycor also spoke with employees and found that culture, not higher compensation, is actually what’s most important to them. Over the last two-and-a-half years, the pandemic has reshaped many employees’ priorities, including around the type of organization they join. Company culture—fueled by everything from opportunities for upward mobility to how team meetings are conducted—can either make or break retention. Now, more than ever, is the time for employers to center culture in order to center their employees.
Flexibility isn’t a fad
As scores of research has shown over the last few months, the rapid shift to remote work when the pandemic started is no longer a temporary fix—flexibility is here to stay. Besides culture and higher wages, flexibility was a top factor that employees said would keep them from leaving an employer. And according to the research, many employers in 2023 will recognize that, as they cited flexible workplaces as another top retention strategy.
Retention in this unprecedented market is a new challenge for all employers to navigate—but it’s one that’s highlighting the need for innovation as a cornerstone of the talent strategy. Being willing to try new approaches, pivot and reinvent are all essential in an environment like this. While that may be a hard sell for business leaders committed to sticking with tried and true strategies for success, the start of 2023 will be here before employers know it—so now is the time to gear up, get creative and put your people at the heart of your work.