Stop us if you’ve heard this before: the U.S. economy, by all accounts, is booming. As part of the boom, businesses and organizations are hiring at a record pace. There are roughly 6.7 million job openings in the U.S. right now. To put things into perspective, less than a decade ago, there were only 2.4 job openings.
Stagnating wages, why aren’t employees getting raises?
Raises are happening. They’re just not that big. Right now, wage gains lag behind when compared to overall economic growth. The average wage gain is 2.7%. That’s essentially in line with inflation.
From leading economists, to business owners, to hiring managers, everyone has a theory as to why wages are stagnating. Some point to outsourcing. Others say it’s the gig economy. And some executives believe that workers are at fault, since they’re not as productive as they used to be.
Other theories suggest that:
- After the Great Recession, the economy added thousands of low-wage jobs, which has kept per-capita wages lower.
- Globalization and automation have created opportunities for cheaper, or even machine labor.
- Companies are putting more money toward benefits, perks, and employee insurance costs.
In an environment where companies are hiring, and big raises are few and far between, employers run the risk of losing talent. That’s because workers know they can find the pay they want somewhere else.
What can you do to keep your people happy?
We’ve shared three tips that can help your retention efforts, even if a sizeable salary bump isn’t part of the equation.
Workers at all levels want to know they matter. In an era when big raises are hard to come by, what can you do to show your people that they matter? Download our recent Spotlight, “Wage Stagnation,” which offers insight into the current wage trend, and the steps that some companies are taking to support retention efforts.
The good news about wage stagnation: happy workers want more than money
For plenty of workers, money isn’t everything. Even when an employee can open up a job search site on their phone and check comparable salaries, there’s more to workplace happiness than just how much money they can take home.
Employees want to know that they’re a part of your future, and that you care about their experience.
With that in mind, here are three tips that can help bolster your retention efforts in lieu of offering raises
1. Make career mapping a priority
Career mapping can enhance an employee’s job satisfaction and motivation. This can spur productivity, and improve morale throughout departments.
Some companies make career mapping part of the onboarding experience. Others wait until an employee has been on the roster for a little while. No matter when you start, career mapping can be a powerful reminder that you value your people. It can also help employees see where they fit into the larger picture.
Career mapping can open the door to promotions that align with an employee’s goals and progress.
Even though wage growth has slowed down, promotions have not. In fact, one recent report suggests that promotions without salary bumps are more common than ever—and that employees say Yes more often than not.
- Today, 39% of HR managers say their company is offering promotions without raises.
- What’s more, 64% of workers are agreeing to promotions that don’t include salary bumps.
When a promotion aligns with career mapping—regardless of a raise—it can help reinforce the mapping process, and remind employees of how much you value them.
2. Revisit your perks and benefits
As SHRM points out in its 2018 Benefits Report, benefits play a key role when employees are deciding whether or not to stay with their current jobs. More and more organizations are aware of the link between benefits and retention.
Nearly one-third of employers surveyed in the report stated that they increased their benefits in the past year to help retain and attract talent.
However, benefits can come with a price: rising health care costs.
Every employer that offers health benefits is dealing with rising costs. As such, employer-sponsored health plans now represent a larger share of employee compensation than ever.
When you have to put more money toward employee health care, you have less to put toward salary increases.
A recent white paper by the Federal Reserve suggests that the rising values of health insurance might actually offset wage gains for many workers. Therefore, when you factor in the cost of coverage, salaries and wages might actually be higher than wage numbers suggest.
This might be why a number of new types of benefits have become more popular.
Many employers now offer various optional benefits to support their workers, including things like financial wellness programs, more PTO for new parents and caretakers, and even voluntary health coverage for part-time employees..
If you’re putting less money toward salary budgets right now, new at-work perks or benefits can be key to enticing your workers.
3. Focus on onboarding
Attracting new talent is a never-ending battle. After you attract a key person, you don’t want to lose them. But that’s exactly what can happen in a strong hiring environment, especially when big raises aren’t part of the retention strategy.
Onboarding is one of the keys to retention.
According to many executives, up to 25% of new hires leave within their first six months. The reasons often point back to one of two consistent themes:
- A new employee’s role was different than what they thought they were being hired for; or
- They didn’t feel like the company was the right cultural fit.
What happens after a new hire’s first 90 days can make the difference between turning them into a key contributor, or a passive job seeker.
Onboarding is an opportunity for new and recent hires to discover the company’s culture, get acquainted with processes and systems, and start their journey toward career growth.
In addition, your onboarding program can build a bridge between the new hire’s development, and the company’s long-term vision.
The economy always ebbs and flows. Cultivating the employee experience can be the key to retaining top talent— whether or not wages are stagnant.
Today’s employees care about perks, benefits, and the culture of where they work. myStaffingPro’s applicant tracking software helps you stay organized, and leave a positive impression on your newest hires. Contact a representative today, and find out how we can help you get the most out of the hiring process.