The new year often comes with change, especially in employment. In January 2022, around 4.25 million
workers in the U.S. quit their jobs according to a report released by the U.S. Bureau of Labor Statistics.
Many employees unsatisfied with their job use the new year as an opportunity to quit and find a new
position. Companies face not only the loss of valuable employees but take on the cost of hiring new
ones. A study done by the Society for Human Resource Management (SHRM) found that it costs a
company anywhere between 50-80% of that employee’s yearly salary to hire and train a replacement.
For a mid-level position, this can cost the employer roughly $40,000 for every employee lost in the new
year. To avoid expensive turnover, the employer must prioritize the needs of their workers to ensure
retention.

Here are some strategies that companies can use to increase retention in the new year.

Evaluate Employee Compensation

Companies often give end-of-year bonuses to their employees to share their appreciation. However, a
bonus may not be enough to retain employees anymore. The new year is a great time to evaluate
salaries company-wide and include raises in addition to an annual bonus. In some regions where wages
are changing even more rapidly, it may be appropriate to review salaries every 6 months to ensure
employees are making market wages. According to a study from Pew Research Center, 63% of
employees cite lack of pay as their main reason for quitting. In industries like HVAC, there is often a
slow-down in the first quarter, which may affect a company’s ability to offer a raise. However, raising
someone’s annual salary will be minimal in comparison to the cost of replacing them. Setting aside funds
and budgeting adequately throughout the year for annual or semiannual raises will save money in the
long run. With inflation continuing to increase, employees are concerned now, more than ever, about
their salary. Offering raises is a way to show employees they are valued and appreciated in their
position.

Prioritize Benefits Packages

While compensation is a major reason for employees quitting, benefits must also be enticing enough for
people to stay at their current company. In an article published by Forbes, it was reported that “for
almost six in 10 [employees], health benefits ranked as the most important non-salary-related factor
they consider.” While providing health insurance is strongly advised in today’s competitive job market,
companies that do not provide employer-sponsored plans need to make efforts to assist their
employees in obtaining coverage elsewhere. There are other health insurance options, and if employers
do not provide care themselves, they should be sure to inform any uninsured employees of their
options. Benefits like paid-time-off and sick leave are essential for employees to feel like they have a
good work-life balance. Employees also appreciate other fringe benefits such as a take-home vehicle,
company-provided cell phone and tablet, EAP programs and 401k/retirement offerings. According to the
same study, a company’s benefit package is the second thing that people look at when deciding whether
to take a job offer, after salary. Ensuring your benefits exceed your competition’s can make an employee
that feels dissatisfied reconsider leaving their position.

Allow Opportunities for Advancement

When employees feel there is no room for advancement in their current job or that they are not being
considered for promotions, they will find a different job that will offer them growth. A study published
by McKinsey found that 41% of people who quit their jobs in 2021 left their job due to lack of
opportunities for career advancement. But opportunities for growth extend beyond promotions.
Companies can encourage retention by offering opportunities or reimbursement for licensures,
certifications and other educational advancements. In most industries, it is possible to find conferences,
seminars or other networking events that employees will find valuable. Without professional growth
opportunities, employees may begin to feel they have outgrown the company and decide it is time to
move on. Regular one-on-one meetings with your employees to discuss their future with the
organization are a vital part of employee retention. To ensure retention each year, employers must
make an investment in their employees and routinely consider each position for promotion or
professional development opportunities.

Conduct Stay-Interviews

Stay-interviews go hand-in-hand with regular one-on-one meetings with your team. Holding regularly
scheduled stay-interviews are a good way to check in on your team to see if they feel they are receiving
the resources they need and have a good relationship with their superiors. When asked directly,
employees are more likely to voice their concerns and speak up if they are unhappy. With these
meetings, employees will have a safe environment to discuss their concerns and you will have the
opportunity to correct the issues they are having. Once an employee decides they don’t want to work
for you, it is difficult to change their mind. If you address the problem before it escalates to the
employee’s resignation, you will likely have higher retention rates in the new year.

To increase employee retention in the new year, companies must understand the value of their
employees and look at the things that matter most to them. People want more out of their careers than
just a paycheck. When employers put their employees first, they are more likely to stay with the
company through the new year and for the long haul.

Unsure whether you are doing enough to retain your employees through the new year?
Recruit4Business can perform a variety of audits on your company and advise you on competitive
salaries and benefits in your market. We are certified to help with retainment strategies, employee
engagement, manager development, and a variety of other HR needs.

Don’t fall for these common mistakes. Connect with us today to strategize employee retention tactics
and learn how to become the employer of choice in your market!