The True Cost of Employee Turnover During a Recession? Your Entire Business. Rethink Your Strategy to Make Your Top Talent Stay. In the midst of ongoing economic uncertainty and increased layoffs, companies must rethink priorities to keep top talent from leaving.
- 1. Rethink what cost means for you and your business.
- 2. Perform a care edit on your benefits package.
- 3. Get to know people on a deeper level.
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We hoped we had weathered the storm, that the Great Resignation and the Great Reshuffle had passed us by, but the employment landscape is still suffering severe aftershocks. In the tech industry alone, 2023 has brought more layoffs than last year — over 240,000 tech employees have been laid off this year, a 47% increase from 2022, according to Layoffs.fyi.
Some layoffs are happening despite companies seeing profits improve. LinkedIn, for example, has grown in revenue over the last four quarters but still announced in May that it would cut 716 jobs in sales, support and operations in an attempt to streamline its processes. Other industries are far from safe.
Especially as we enter another season of unpredictable economic news and pervasive uncertainty, it will be crucial for companies in any sphere to strategize on how to keep top talent from leaving, how to measure employee satisfaction and how to navigate employee retention during a recession. Here's my advice.
Related: How to Attract and Retain Top Talent
How can companies boost employee retention during a recession?
The importance of retaining talented employees cannot be overstated. Employee turnover has a direct line to the overall health and well-being of your company. Similarly, employee retention can signal to others that your culture is strong and can make the rest of the team feel reassured and ready to face another day.
There are many things that company leaders can do to stop the cycle of employee turnover and retain the best people — those most aligned with the company's values and those most equipped to face its challenges. Most of these strategies involve improving the way you appreciate team members:
1. Rethink what cost means for you
Many CEOs balk at any extra cost at this time. After all, why would you shell out for a new program or initiative when you're having to cut costs drastically elsewhere? It's hard to commit to a cost you don't know you'll be able to sustain.
However, it is well worth considering cost from different perspectives. The cost of losing employees to more caring or rewarding employers is a very real financial outlay. Consider the various costs involved in recruiting and training a new employee, the inevitable slowdown in productivity as they learn the ropes, not to mention the mental cost on team members who are in the midst of a crisis and seeing their co-workers depart. If you can't afford to lose talent at this critical time, then you also can't afford to treat your employees as just another cog in the machine.
Just take Adobe, for instance. The digital giant is ranked No. 1 in employee satisfaction, and this appreciation for its employees extends to its minuscule turnover rate as well. In times of turmoil, it's important to learn from the masters and invest in your employees today so they can be your top talent tomorrow.
2. Perform a care edit on your benefits package
Fear of being laid off comes along with a myriad of mental health symptoms. From self-esteem damage to depression, living with the real or perceived threat of unemployment can lead to significant distress, which (in today's climate) can become a long-term problem.
These symptoms can be further exacerbated if an individual's workplace doesn't respond with kindness. Taking care of team members and finding ways to show employee appreciation are especially important during uncertain times. If you fail to respond to these anxieties with care, your company risks losing talented, core members of your team.
Fortunately, there are many ways to show employee appreciation that goes far beyond higher salaries. For example, HubSpot offers its employees unlimited holidays, flexible work agreements and perks for additional mental and physical well-being. By supporting employees, HubSpot continues to boast solid employee retention, even during economic uncertainty.
Fortunately, your business can enjoy this stability, too. Start by performing a care edit on your benefits package and getting rid of anything that doesn't serve employees' health and well-being. Then, add the things that will truly help your team right now. Health insurance, dental care, gym membership or yoga sessions, healthy snacks/meals at work and even therapy. All of these benefits could help you differentiate your place of work from competitors in the marketplace and make employees feel cared for and more apt to stay.
3. Get to know people on a deeper level
When you're navigating an economic downturn, employees can quickly become numbers on a spreadsheet as you work out what you can afford. However, companies should never let this sensation become a reality. Lose touch with your employees and you'll lose your top talent just as quickly.
Consider Google, for instance. Companies often look to the search giant for examples of how to keep top talent from leaving, and for good reason. Leaders at Google are acutely aware of how important company culture and trust are to a successful company; that's why they prioritize employee relations to ensure their brand culture remains cohesive and effective. Just like Google, it's critical for your company to stay aligned with employees and ensure every employee feels like a part of the bigger picture.
However, the process of getting to know people shouldn't stop after onboarding; people's needs and goals change as they grow within a role. Leaders who keep in touch with these changing selves and the many personal successes that come along the way will be able to better offer advice and support their team towards achieving their personal goals.
For example, the greeting card experts at Hallmark regularly practice recognizing employees by sending personal birthday cards, anniversary cards, thank you cards or greetings just to say "job well done." Other businesses can take a page from the experts in this regard as well — especially since employees who feel like their workplace celebrates their achievements and remembers their important dates will be more likely to stick around and grow their careers within the company.
It may be a hard and unpredictable time for your company. With daily reports of layoffs peppering the news cycle, your employees may be feeling anxious and overwhelmed. But this is not a moment to cut back on caring for your team. Invest in supporting and appreciating the talent that makes your company what it is — this is how to keep top talent from leaving.