How to adapt to high employee turnover in your business
The pandemic caused a myriad of crises in the U.S. and around the world, not the least of which is the “Great Resignation,” in which millions of Americans have left their jobs.
In December of 2021, the number of “quits” – people who voluntarily left their jobs as termed by the Bureau of Labor and Statistics – was 4.3 million. The sectors most affected, including hospitality, healthcare, and retail (those on the frontlines and often in low-paid positions), were suffering from burnout or taking advantage of a big employee demand to switch to higher-paying jobs with greater opportunities.
This has left Corporate America struggling, particularly with entry-level positions. Compounding this challenge is the fact that these roles are hardest to hire for, require greater investment and training, and are increasingly only being held for short periods of time.
Challenges to come
Much of the high-churn in entry-level positions has been attributed to the Great Resignation. However, we’re likely looking at the emergence of a new phenomenon (dare I say “new normal”) that includes a talent deficit, disinterest in roles that require routine or repetitive activities and the corresponding need to restructure how our businesses operate.
A Korn Ferry analysis estimates a global talent deficit of 85 million workers by 2030, causing a skills shortage that could result in more than $8 trillion in unrealized annual revenue. Companies large and small are struggling to find enough workers amid the economy’s rapid recovery from the pandemic-spawned recession.
While these roles are the most challenging to fill, they’re also generally the easiest to automate. For small businesses and CEOs, this situation completely changes the way they hire, structure operations, train and invest in technology/automation.
Here are a some tips to prepare for fundamental changes in your workforce and operations:
Deploy technologies and automate
Gartner reports that “digital dexterity” among employees will increase productivity and take some of the pressure off workforce churn. Workers with technology know-how and an open mindset can generate business value.
The tasks that are easiest to automate now are the administrative ones. Also coming into play in the near future are AI automated technologies like virtual personal assistants and chatbots, which are expected to replace routine employee tasks.
Upskill senior talent
With churn occurring amongst entry-level employees, it’s critical that leaders focus on upskilling senior talent and managerial team members. These are the people that are likely to stay on, particularly when their jobs are meaningful, play to their strengths and have paths to career development.
However, upskilling shouldn’t be the exclusive strategy. A McKinsey report states that a combination of redeployment (moving to a different role), reskilling (building a different skill or skill set) and upskilling (building a higher level of competency) may be required to set employees, and the organization, on the right paths to success.
Accept and adapt to a high-churn environment
The sooner business leaders recognize the shift underway, the sooner they can start to prepare. For high-churn positions, create work plans and tasks that are three to six months long. Consider interns, partner with a local community college, prep course-style engagements, apprenticeships and mentorships. In other words, if you plan the job with turnover in mind, it will be easier to manage.
Consider outsourcing
While the pandemic has created a multitude of challenges for businesses, it has also created new opportunities such as greater outsourcing. Areas of outsourcing that tend to work well are in marketing, finance and HR. You'll need at least a few employees in-house to oversee strategy and align with business goals, but a lot of marketing legwork like copywriting, design and advertising, back-office and finance work like bookkeeping and accounts receivable/accounts payable, and IT and data security can utilize contractors or freelancers.
Beware of outsourcing customer service, as good customer service can often be a differentiator for a business. Don’t let the “Great Resignation” be the cause of reduced loyalty and decreased sales because of poor customer service.
Divide functions and conquer
In dealing with high turnover, it’s important to get down in the weeds and evaluate job descriptions and the roles they play. Think about dividing functions and roles between client facing and non-client facing. By doing this you can insulate roles with high turnover to the non-client facing side.
There are a couple of advantages to this strategy: it’s a way to provide continuity and familiarity in servicing clients and it ensures that your best talent is out there cultivating relationships and growing the business.
Prepare the next generation for the future
In bringing in interns, creating apprenticeships and partnering with community colleges to stem the churn tide, consider being part of the solution for the next generation.
Businesses can support greater training in areas such as IT, coding and programming, which entry level workers will use to service and create automation. The next generation of the workforce will also need greater managerial and analytical skills to adapt to increasingly complex roles.
Go back to school
It’s clear that the way we work is fundamentally changing and will keep changing after the pandemic. So it’s up to you to get educated and be prepared to make the changes necessary to thrive in the coming years. Get up to speed by joining peer-to-peer groups, following the experts on Twitter and YouTube, and learning from successful entrepreneurs at conferences.
Remember, before you upskill your talent, work on upskilling yourself.