“Workers in private industry see fastest pay increases in 20 years”(1).
“Pay in the leisure and hospitality sector grew by 23.7% annually in the six months from January to July 2021”(2).
“We have nearly 3 million fewer Americans participating in the labor force today compared to February of 2020”(3).
All of the above quotes are direct causes to the exploding cost of your employee turnover. There is reason to believe there is no relief in sight. As stated in my last article, Peter Ziehan believes wage inflation will last for the next 15 years. He also believes the labor shortage will last at least 40 years. Unfortunately, his beliefs are rooted in fundamental demographics which are hard to argue against.
There is no better time to solve your employee turnover problem
As time marches on, the costs will only go up. The issues creating your employee turnover will only get more complicated and more difficult to solve. Your employer reputation will continue to deteriorate and at some point will be impossible to resurrect. You will continue to lose your better employees and replacements will get even harder to find. The amount of time needed to fill a vacant position will only get longer. This is the typical situation where the standard will be dropped to fill the position. This dropping of the standard will only increase your employee turnover and the resulting costs.
Good employees are always looking for opportunities and a safe harbor
Wage inflation is mainly being caused by employers who have to buy people from the outside for historically high wage rates. They also believe they have to give increases internally to keep the people they have. However, employee engagement surveys have told us for years that trust and respect are the leading employee issues. Money is secondary and better employees will trade money for more trust and respect. Many employers do not accept this fact, which hurts their workforce and their bottom line.
The better employees are proven to be loyal, productive and positive. They are always looking for opportunities for both personal and professional growth. Lastly, they demand respect and trust without reservation. If your employer reputation is not up to this standard, the better employees will never even apply with you.
- Bureau of Labor Statistics, Department of Labor
- Bureau of Labor Statistics, Department of Labor
- U.S. Chamber of Commerce
