As many C-suite executives and HR leaders have come to realize, employee retention and hiring are Herculean challenges in 2022. Here’s why.
National employee turnover has steadily swelled over the past decade. Ten years ago, an average of 2.03 million United States-based employees quit their jobs each month, according to the U.S. Bureau of Labor Statistics (BLS).
Now that number has soared to greater than 4.25 million monthly — more than a 100% jump in just a decade. What’s more, this isn’t a 2022 anomaly; the number is identical to the average turnover for the last six months of 2021.
As a result, the national turnover rate went from approximately 2.8% in 2012 to 7% in 2022. The number of quits per year has been steadily increasing throughout the past 10 years. This is not just a trend that has been brought on by the pandemic.
This “Great Resignation” has left millions of job openings in its wake. U.S. job openings averaged 3.8 million in 2012. Today, nearly 11.3 million jobs are waiting to be filled. Although estimates vary when it comes to the monetary cost of replacing an employee, research indicates that the cost of replacing someone in a technical role may cost as much as 100-150% of the employee’s salary. Loss of a highly valued C-suite employee is estimated at 213% of salary.
Some sectors have been especially hard-hit in the aftermath of these resignations. Consequently, increasing competition exists for employers trying to attract and retain talent.
In 2012, an average of 766,000 professional and business services roles were open, on average, each month. By 2021, this monthly average rose to nearly 1.8 million. And staffing vacancies were more than 2.06 million by Jan. 31, 2022.
The financial sector witnessed a similar exodus, with more employees leaving their roles. Again, annual monthly averages for job openings steadily rose each year, then dipped in 2020. However, 2021 saw a resurgence of open positions. As a result, there’s been a 118% spike in job openings in the past decade.
The educational and health services sectors were hit even harder, with openings growing to a whopping 214% between January 2012 and January 2022 — from 679,000 openings monthly to nearly 2.13 million.
Therefore, to attract and retain talent in 2022, organizations are becoming more generous and/or more creative with their benefit offerings. These benefits aren’t just designed to achieve work-life balance, but rather a “life-work tilt.”
Why a Life-Work Tilt?
In part, a “life-work tilt” is the result of office closures during the pandemic. Many employees became accustomed to working from home. They enjoyed the flexibility to take part in family activities, revisit hobbies and engage with other interests.
Some employees lost family members to the COVID-19 virus and came to view personal time with loved ones as an even more precious commodity. As many companies call workers back to the office, disrupting the work-life balance they achieved over the last few years, many have opted to change jobs or to leave the workforce altogether.
As The Greatest Generation passes away and Baby Boomers increasingly retire, Millennials are making up the greatest segment of the workforce. After financial compensation, Deloitte found that Millennials value good work-life balance — even ahead of career progression, flexible working arrangements, meaningful work, and making a difference in society. Similarly, Gen Z employees also expect a better work-life balance than their Gen X and Boomer parents.
In 2022, executives and HR leaders are leading the charge for organizational changes that proactively achieve balance. The corporate “work-life balance” standard must evolve to align with the changing needs and desires of a workforce that increasingly values time to explore personal interests and spend time with loved ones, rather than focus on their career development and professional responsibilities.
These benefits include shifts in organizational culture, such as encouraging employees to disconnect electronically and set boundaries around their time availability, trusting employees to work remotely and offering step-away-from-work options so workers can attend to personal issues.
Flexing … Everything
As many HR benefits leaders have come to realize: “flexible” is key to today’s benefits structure and the definition is broadening in 2022. A recent study supports the idea that flexibility now not only includes flexible workdays, but also flexible work times within the day, flexible workplace options, and even flexible benefits themselves.
Flex hours especially can support DEI, as many women are the primary child and adult caregivers for their families. Often, these women work after putting a child to bed, before and after taking an aging parent to the doctor, during a child’s naptime, or on weekends.
The ability to step away from work can provide employees with peace of mind and balance. The flexibility to drive a child to school, take a walk or pick up a few groceries can go a long way to achieving employee work-life balance. The focus is on completing work effectively — rather than having a warm body in a seat or a green glowing light that proves an employee is online.
Since the global pandemic began, employees have developed preferences for where they want to work. Some want to work only in the office; others only want to work remotely. Others prefer a balance of the two.
Each employer must find a unique blend that will keep workers engaged and productive while meeting company goals. To this end, companies have adopted several models across the spectrum, including office-centric, hybrid, blended, or fully remote options.
In terms of flexible employee benefit options, benefits professionals are looking at entire packages to ensure that overall benefits packages are equitable. Some employers are even giving employees a stipend to apply to benefit options of their choice.
In this case, employees can choose from a wide range of benefits such as eldercare and childcare support, additional paid vacation time and time off to take part in social justice initiatives.
Making Room for Family Responsibilities
Family leave without pay is included in the Family and Medical Leave Act (FMLA). However, only one in four employees in the US has access to paid family leave.
The pandemic has brought caregiving issues to the forefront of conversations about employee benefits. Parents have struggled to juggle work, remote education, shifting divisions of labor, and more. Employers are now offering more childcare subsidies through spending accounts and bonuses.
With the graying of the Baby Boomer generation, adult caregiving is a real and growing issue. Thirty million family caregivers of adults are in the labor force — a surefire reason adult caregiving benefits will only continue to expand.
Overall, 40% of unpaid caregivers for aging or special needs adults dramatically alter their work status and schedule. They drop to part-time, take paid or unpaid leave, take sick days, are absent, quit, or retire early.
In response, proactive 2022 employers are offering one-of-a-kind adult caregiving benefits that focus on the specialized needs of those who are caring for aging or special needs adults. These benefits have been shown to keep employees at work, rather than taking a leave of absence, quitting or retiring early; enhance productivity and workplace satisfaction and provide tailored support to employees, aging loved ones and their families.
These benefits are especially important to women who shoulder most of the responsibility for child and adult caregiving in the United States. Employers who want to attract and maintain a diverse workforce, including women, are now providing employee caregiving benefits.
Furthermore, employers who want to distinguish themselves in a competitive hiring market are offering paid leave and caregiving benefits to part-time employees in 2022.
As mentioned previously, part-time employees are often a strategic solution to staffing shortages.
It’s not easy to be an employer right now. As an HR professional, navigating the delicate balancing act between employee needs, staffing, benefits solutions and company budgets can feel like an impossible and never-ending challenge.
“Employers continue to believe that they’re in control of employment relations, but with the current economic condition, employees are squarely in control. Employees are sellers in a sellers’ market,” said Danny Nelms, president of The Work Institute.
In this sellers’ market, innovation, creativity, flexibility and a willingness to truly listen to the evolving needs of employees will be key throughout 2022 and beyond. Shifting the focus on work-life balance towards “life-work tilt” will not be a smooth or seamless transition, however. It’s a necessary one to attract and retain top talent in one of the hottest labor markets of the 21st century. Is your organization ready to tilt?