Source | Workforce
According to the most recent “ADP National Employment Report,” the U.S. private sector added 257,000 jobs in December. While economic indicators like this are great news for American workers, the strengthened economy’s effect on the jobs market now poses new recruitment and retention challenges for small and midsize businesses across the country. There have been 69 consecutive months of private sector job growth, and that’s led to talent scarcity in some areas — a major trend reversal from the 2007 to 2009 financial crisis and subsequent recession.
This talent challenge is further compounded as small businesses also have fewer resources than larger companies to attract and retain the best employees. Ultimately, an employer’s preference is always first to retain the high-performing talent they currently have rather than competing in the jobs market. A recent internal survey of ADP’s small-business clients indicated that 40 percent of small businesses (those with between one and 49 employees) felt it was more difficult than expected to fill positions, and one third said it took longer than expected.
When considering employee retention best practices, increased wages is the most readily apparent method to improve employee morale and commitment. However, pay raises typically provide a temporary benefit and don’t always address the root cause of why employees decide to leave. Luckily, there are a variety of methods to retain talent that are both more effective than simply increasing salaries.
One principal area employers often overlook is the importance that employees place on retirement planning. According to this year’s retirement confidence survey by the Employee Benefits Research Institute, only 22 percent of Americans feel “very confident” that they will have enough money to live comfortably in retirement. Whether they know it or not, employers play a big role in long-term retirement planning for their employees, and it’s important those employees see their employers as an integral part of their retirement planning.