In the United States, in the five-year period of 2016 through 2020, the total labor force turnover steadily increased each year to 57%. And the hardest hit industry, food service, experienced a whopping 130% turnover in 2020. I don’t expect that to change anytime soon. And, let’s face it, attrition is costly; as high as 400% of an employee’s salary for a highly skilled worker.
So, what’s a company to do to combat these high attrition rates? One way to do it is to identify its employment value proposition (EVP) and translate that into a strong employment brand. Acknowledging that no single company can be all things to all people, it’s important for companies to establish its brand and market it broadly and consistently. And, of utmost importance is to differentiate the brand from competitors for talent in the industry. Here are some elements of an EVP which companies can evaluate to construct its employment brand:
Are your salary scales in the top quartile of your industry? Do your bonus programs typically pay out annually and often above target? Are your benefits superior, either in total offerings or lower employee contributions? Does your company offer any non-traditional perks such as onsite day-care or ‘bring your pet to work’?
Are you able to demonstrate a high rate of internal mobility, including promotions? Do you have formalized training programs and/or online, on-demand learning sessions that are offered to employees? Does your company have tuition reimbursement for degrees and/or certificates?
Is your company growing in footprint by adding new locations to its business? Is there a strong, positive revenue/profit trajectory? Is the overall employee population growing?
Does your company have a purpose beyond its core business? Is there a contribution to the ‘greater good’? Are candidates able to align with the company’s mission and find value that the work that they do is ‘more than just a paycheck’?
These are some of the core EVP attributes typically utilized by companies to establish their employment brand. There are others which companies can use to differentiate themselves from competitors for talent.
Gartner’s current “State of the Labor Market—United States” professes that “to effectively source critical talent, organizations need to build and enhance brand awareness and sourcing capabilities. Otherwise, they will struggle to attain top talent to ﬁll positions”. Almost 50% of employees will quit their jobs within the first six months of employment. The last thing any company needs is for new employees to get onboard and think, ‘My God, what have I done’? Make your EVP tangible for candidates. Ensure that you can answer their question of, ‘What’s in it for me’? Align your company’s employer brand with candidates’ needs and desires from employment and high turnover can be mitigated.
By the way, rewards is the #1 candidate-valued EVP attribute of 2022.