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How to Retain Talent In a Hot Job Market
February 9, 2022
With an ongoing pandemic and swelling numbers of white-collar employees resigning for greener pastures, the conversation continues among our peer group members: What will it take to retain talent and pay them fairly?
In reviewing a recent article in the Wall Street Journal, I noted that inflation is at its highest rate in nearly 40 years at 7%, and compensation for US workers has grown at a rate we haven’t seen since the turn of the 21st century. Industries that saw exponential increases include hospitality, law, and finance. While hiring stalled and layoffs were abundant during the early months of the pandemic, there’s no longer a shortage of work, and skeleton crews are being worked harder than ever – with organizations fairly compensating them for the increased workloads.
High salary numbers are flashing like neon signs, and white-collar workers have plenty of options and are more willing than ever to negotiate. Economists worry that this could initiate a wage-price spiral: The cost of raising wages leads to higher prices for consumers, leading in turn to employees asking for a wage hike to match the cost of living inflation.
Another wage-related challenge that our peer group of St. Louis area business owners are seeing is the “poaching” of C-suite execs, particularly among controllers and CFOs; recruiters are being offered financial incentives to be aggressive about filling empty spots. The candidates aren’t even actively looking for new opportunities, but the recruiters are finding them and making them “offers they can’t refuse”.
With so many balls in the air, it’s not easy for executives and owners to know how much of a wage increase is appropriate. Many hesitate to pull the trigger in a wage hike because there’s no way to walk back salary exceptions once they’re bumped up. Ultimately, it’s easier and less expensive to retain talent already in place instead of looking for new employees. If you’re not giving them what they need to stay happy and engaged, your employees will go elsewhere – likely straight to the competition.
Working together with a peer group means that the decision to incentivize staying with increased pay doesn’t happen in a vacuum. Lean on the other members to help guide this number-crunching and shape the process of what that would look like. Get ahead of poachers now, even without boosting wages, by conducting salary reviews and getting a better idea of how much your business can afford to raise wages.
If accounting isn’t yet ready for raises across the board, get creative with things. For example, instead of a 10% increase now, offer 5% upfront with another 5% added in 6 months when employees or teams hit key performance indicators. A peer board will provide a spectrum of different perspectives, all from a business owner’s point of view, and may inspire you as a leader.
Having a support system and sounding board composed of like-minded, experienced, and driven professionals makes all the difference for our members. They are no longer alone, trying to solve problems and find new opportunities. They take advantage of each other’s strengths and gifts to make each member as successful as possible. While your business may not be large enough to have an official Board of Directors, you still need the advice and support that comes with this type of organization. That’s where we come in to fill the void.
You may even discover that you want to continue using The Alexander Group as your business grows instead of starting your own group. Why deal with the hassle of hiring and maintaining a group when you can get all of the support and benefits from The Alexander Group? Our system has the format, tools, and leadership in place to help you increase profitability and make the most of your business today and in the months and years to come.
Are you ready to get connected with a group of like-minded business owners? Contact us today to discover what our Peer Board has to offer.
