How to Retain Talent in a Labor Crisis and Beyond

An attrition wave is sweeping the nation. The Department of Labor reports that in April, May and June 2021, a total of 11.5 million workers quit their jobs. And it’s not over. According to Gallup’s research, 48% of employees are actively looking to make a change, and Personio research indicates nearly one out of four employees will do so in the next six months. 

Corporate America is struggling on two fronts: record attrition numbers and a severe worker shortage. In August, over 10.4 million positions remained unfilled across the country. Many companies seek a quick fix to increase pay, offer bonuses and add perks to battle the war.

If retailers behave as if this is their only ammunition against checking out and walking out, they unwittingly send the wrong message to their people that their relationship with them is transactional and that the only reason for employees to stay is a paycheck. Research shows the motivational effect of pay raises is short-lived. The better move is for retailers to pivot on respecting, recognizing and valuing the contributions and impact of their people.

To attract and retain talent, retailers need to develop a comprehensive strategy in the workplace, starting with understanding their people’s needs and demands—the real drive behind attrition. The finding from McKinsey’s research reveals the top three factors employees cited as reasons for quitting were that they didn’t feel valued by their organizations (54%) or their managers (52%) or because they didn’t feel a sense of belonging at work (51%).

Noticeably, employees of color were more likely than their white counterparts to say they had left because they didn’t feel they belonged at their teams or companies. It’s a worrying reminder of the underrepresented groups of employees.

A Four-Step Strategy to Help Stem the Tide

1. Employee engagement. Explore various channels to listen, learn and understand employees’ top of mind and the state of discontent, especially among women and employees of color. More importantly, respond to the feedback and make changes to course-correct. If employees don’t see any changes made after listening sessions, they believe their input, experience and knowledge isn’t valued.

Employees want to be respected as individuals, so it’s important to acknowledge different needs and wants within the workforce as well as appreciate diverse backgrounds and perspectives. Provide psychological safety for employees as a resource for sharing, exchanging, risk-taking, vulnerability and emotional response instead of an end state that prioritizes “being nice” and stifles dissent and honesty.

Communicate the realities of challenge and its impact. Create space for employees to step up, participate and inform the way forward with innovative ideas. Engage them to shape the plan so they have a sense of ownership while executing the projects, removing the career barriers and solving the issues. This practice sends the crucial message that they are trusted and valued. Outcomes are better when more ideas are included, fuller representation is present, and diverse perspectives are heard.

2. Leadership behaviors. According to LinkedIn, 75% of people quit their job to get away from their manager at some point in their career. Non-inclusive behaviors of a manager remain the number one reason why people quit their jobs. People exit because they don’t feel fairly treated, respected and valued.

Amid an influx of resignations, genuine displays of empathy from leaders and managers can make an enormous difference. Teach inclusive leadership with empathy and humanity—a cornerstone of effective management that fosters trust-based relationships, lifts overall engagement and performance, and strengthens talent retention—even in the crises of times. CEO and C-suite executives must walk the talk and lead by example.

3. Equitable environment. Today’s talent market has shifted. Employers need to think of their employees as human beings first and invest in cultivating a fair climate to retain them. This commitment helps slow attrition and regain the growth curve. 

By building a level playing field, everyone has a fair chance to develop and grow, enjoys access to information and resources, and contributes to decision-making processes. Integrate equitable and inclusive practices through critical moments of the talent life cycle such as hiring, onboarding, development, promotion, performance review, and total rewards. Under that work environment, people share a common purpose, enjoy connectivity and collaboration, and nurture a strong sense of belonging. 

Given how the nature of work is changing so dramatically, it’s vital to provide equitable opportunities to get people trained and upskilled on new technology, data and analytics, communicating and cultivating new relationships. Other nonmonetary incentives include increased recognition and access to mentors, executive sponsors, and the like for additional development support.

4. Flexibility and well-being. Among survey respondents who had left their jobs, 45% cited the need to take care of family as an influential factor in their decision. A similar proportion of people who are thinking of quitting cited the demands of family care. Expanding childcare, nursing services, or other home- and family-focused benefits could help keep such employees from leaving and show that you value them as whole people.

According to the Gartner study, 74% of human resource leaders mentioned their organizations offer more flexibility options to employees to address employee turnover. It includes the option to work remotely on certain days during a week and work remotely occasionally upon approval from the employee’s manager.

Invest in employees’ physical well-being, mental well-being and financial well-being. Commit to incorporating physical well-being into all health and benefits programs and actively communicate the offering with employees. Support employees’ emotional well-being by enabling new ways of working, building psychological safety, and contributing to a workplace for all. Evolve financial well-being with a focus on pay-for-performance and incentives that support new business areas enabling an ability to attract/retain talent.

Focusing on well-being should not be a one-off practice but an everyday habit. Small steps go a long way. For example, encourage leaders to take time at business meetings to share what they’re doing to prioritize well-being and encourage peers to discuss how they’re caring for themselves, too. Through Thrive Global, employees can download a free app for tools and tips from experts to improve sleep, understand the benefits of meditation and find gratitude. The app also offers healthy eating, weight loss support, debt management and financial well-being resources.

Design a paid time off (PTO) plan that gives employees the flexibility to take time off when they need it the most. Studies show that people who take time off have lower stress, less risk of heart disease, a better outlook on life, and more motivation. With PTO, employees have the freedom to focus on their well-being however they choose.

The Great Resignation is a severe challenge that penetrates across industries and no organization is free from it. To bend the curve and win the talent war, we must adopt a holistic strategy as an integral part of new ways of working in the workplace.

Donald Fan is senior director of Walmart’s Global Office of Culture, Diversity, Equity and Inclusion. Click here for more on how Walmart, Albertsons and Target are accelerating change.