Pressure on employers to retain employees rises as turnover increases

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Concerned by emerging turnover trends, many employers are ramping up retention strategies. One such strategy involves managers conducting “stay interviews,” to find out what employees enjoy about their work, what they’d like to change and what would make them leave. A growing number of organizations have also hired or appointed employee experience officers to stay on top of changing workplace expectations. In some cases, chief executive officers have taken on this role themselves.

Michael Leblanc, CEO of Oakville, Ont.-based First Canadian Title Company Ltd., takes a weekly pulse. He encourages the firm’s 1,200 employees to “reach out to me directly” with comments, concerns, suggestions, big ideas or anything else that’s on their minds. The communication could be about stress levels, excitement/trepidation about returning to the office, business innovations, child-care challenges, compensation, the desire to continue working remotely at least some of the time. The feedback has enabled Mr. Leblanc to move quickly on matters that could affect recruitment and retention at the company, which provides title insurance and real-estate-related services.

Since the onset of the pandemic, Mr. Leblanc has expanded mental-health benefits and retained an epidemiologist to advise on the safest return-to-office protocols at FCT’s locations across the country. The new work model will be hybrid, combining on-site and remote work.

“This year we had a really good spring, people worked really hard and we declared a special bonus and paid it to a good number of our front-line staff,” Mr. Leblanc said in an interview. “We have held our own. I’m not saying we haven’t lost employees, but for the most part our work force has remained intact.”

The changing labour market dynamics have come as a shock to less pro-active employers, human resources experts say.

“Turnover was artificially low last year because of the pandemic; people didn’t want any additional uncertainty in their lives,” says Mardi Walker, executive counsellor at McLean & Company, a Toronto-based human resources research and advisory firm. Now, however, employers face a double whammy, with employees who delayed retirement heading for the exits and others taking advantage of the rebound in hiring to job hop, Ms. Walker said.

They’re moving for money – compensation levels are rising – but also for work environment, especially if they have to leave the house and commute again. For employers accustomed to calling the shots, it’s a difficult transition. Bosses who insist that “everyone come back to the office, no excuses” will have a tough time attracting and retaining employees who have successfully and productively worked remotely for the past 18 months, Ms. Walker said. Flexible work arrangements are a powerful incentive.

“The pandemic has given people time to pause and think and really weigh their options,” said Ms. Walker, who advises executives on retention strategies, including how to conduct “stay interviews.” The annual employee engagement survey no longer cuts it. Employers need to be attuned – in real time – to shifting sentiments. While the “stay” conversations should be open-ended, she said, questions might include “What do you enjoy about working here?” or “What would make you leave the organization?”

“Exit interviews are great [for gathering workplace intelligence], but they’re too late,” said Ms. Walker, a seasoned human resources executive who, earlier in her career, was vice-president of human resources at Senators Sports & Entertainment and senior vice-president, people, at Maple Leaf Sports & Entertainment Ltd.

A recent report by RBC economist Carrie Freestone predicts that pressure on employers will intensify in coming months as the recovery drives increased demand. “We expect retirements [many held off] and quits to pick up,” she wrote in an analysis published Aug. 30.

Human capital firm ADP Canada found in an online survey of 3,032 working-age adults in early September that almost 20 per cent of Canadian employees had been approached in the previous six months by recruiters from other organizations offering better working conditions. Organizations that offer more than money have a definite edge, ADP said. “For what appears to be the first time ever, more and more Canadians – especially those who work remotely – are prioritizing work-life balance over salary,” Heather Haslam, the firm’s vice-president, marketing, said in a release.

All organizations should be reviewing their compensation and benefit packages to ensure that they are competitive in the current market, says Robert Hosking, senior vice-president and managing director, executive and leadership search, at Toronto-based Lee Hecht Harrison Knightsbridge.

“Being able to give somebody additional compensation when they are not asking is very rewarding, certainly, for the individual. They feel valued, they feel recognized and this is actually a really good retention tool,” he said in an interview.

“We’re seeing an increase in counter offers, as well. When people are either looking for something else or going in to resign, their current employer is offering them additional compensation to stay … we’re hearing numbers in the $10,000 to $15,000 range.”

But that can be too little too late if there are other factors driving their people out, which is why it is increasingly important that organizations become attuned to what matters most to employees from the front line to the C-suite, Mr. Hosking said.

In such a robust market, given the choice, even the most ambitious senior-level employees have no desire to return to long hours at the office all day, every day, he added.

“When we are presenting opportunities to candidates and talking about roles, one of the first questions out of their mouths – if we haven’t addressed it – is ‘What is the work situation, is this requiring me to be in the office five days a week, is there flexibility [around remote work]?’ ”

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