The way we work has undergone a significant change in recent years. While at one time, many were content with a ‘job for life’, now an increasing number of people are willingly leaving their roles. This more transient workforce has given rise to a new HR challenge: attracting and retaining talent within the ‘quitting economy’.
This highly competitive environment is magnified when we consider some of the UK’s highest growth industries such as tech. For example, Tech Nation’s latest report revealed that job vacancies within the tech sector are at an all-time high, with a huge 1.7 million openings advertised in 2018. This is compounded by the fact a number of industries are, in fact, facing a shortage of skills. While there is a great deal of roles to fill, there is also an increasing amount of options for people looking to change jobs.
Never before has talent retention and recruitment been so crucial to give companies an advantage over their competitors. With this, the role of HR has shifted to from fulfilling an administrative function to making up a core part of the strategic decision-making process. But to step up to the plate and weather the ‘quitting economy’, HR teams need to change the way they approach finding the best people and keeping them – which requires a holistic understanding of the workforce.
The true impact of the ‘quitting economy’
The financial burden to a business when an influential member of staff leaves is substantial. When taking into account recruitment costs, a fall in team productivity and investment in training, this could be the equivalent of up to double the leaver’s salary.
There are other considerations too, such as lower morale if a valued member of staff leaves, additional workload for remaining staff, team reshuffles and even management changes. Any replacement will also need time to settle in and learn about their new position. All in all, it makes sense to encourage talented employees to stay at a company for as long as possible.
Utilising data to boost retention
There is no bullet-proof solution that HR teams can deploy to completely combat the ‘quitting economy’, but there is a lot they can do to proactively minimise the impact. This involves putting measures in place to really understand their people. Who has left the business and why? Who are the most influential members of the team? What is the overall sentiment of current employees?
To achieve this ‘Google Earth’ picture of the workforce, many HR professionals are taking a data-driven approach by applying people analytics. This allows them to collect and glean important insights from employee data, then predicting and preventing problems within their workforce.
However, employee reviews and legacy HR tech cannot gather the required information from data to get a well-rounded view of employees. For people analytics to work, data needs to be centralised across the business, covering every department and incorporating each individual.
People analytics also needs input beyond HR teams. Employees and managers should be educated on how to regularly contribute and what the business benefits are. In addition, implementing sophisticated technology will help automate some admin-heavy tasks, freeing up time for HR to tackle more strategic issues. Of course, a level of up-front investment will be necessary. However, the return on this investment will speak for itself, countering the negative impact of losing important members of staff.
People analytics is only effective if HR teams act intelligently on the insights gleaned from the data. One proactive step is to comprehensively map the workforce. In doing so, HR can effectively identify internal influencers, uncover connections between departments and spot issues early on. This way, they can make informed decisions and improvements in a timely manner.
Analysing data is also valuable for obtaining a greater understanding of individual employees. In these cases, pre-emptive changes based on facts like a person’s commute and likes or dislikes, can go a long way. By acting on this knowledge, HR can boost work-life culture through day-to-day enhancements.
The role of HR is essential in helping businesses of all sizes gain a competitive edge. A modern and progressive approach to HR, revolving around not just simply knowing the workforce but actually understanding them, will help mitigate the effects of the ‘quitting economy’ and, in turn, produce better business outcomes.