Statistics continue to show that the U.S. job market remains tight and the gap between job openings and available workers remains over five million. However, agencies and brokerages who look beyond the headlines to understand the main factors driving people to switch or leave jobs can achieve much better retention and potentially hold on to talent that helps drive growth.
While recent surveys show that 51% would potentially switch jobs if the opportunity arose, and that a record 4.53 million people quit their jobs in March 2022, there are other studies that go deeper into the reasons behind the high number of resignations. According to a Pew Research study in March, the majority of those who quit a job in 2021 left because they had no path for advancement, did not feel valued or respected, or had low compensation. Furthermore, employees who have professional development opportunities have 34% higher retention and are 15% more engaged, according to a survey from IT consulting firm Better Buys.
A well-designed retention strategy can have a huge impact on hiring and retention, perpetuation, culture, value creation and the overall performance of the business. Here are some important factors to consider when creating your retention strategy.
Create an employee experience that ensures a successful and sustainable retention plan.
Employees overall have shifted their attitudes post-pandemic. Many value flexibility, learning and development opportunities and mentorship. Numerous polls have found that many are willing to walk away if their employer started requiring in-person full-time work. In addition, recent data projections by job search service Ladders estimate that 25% of all professional jobs in North America will be remote by the end of 2023. An employer that offers hybrid or flexible work options may be able to better retain top talent. These factors are important for brokers to manage and factor in when figuring out a retention plan and strategy.
With the increase in remote and hybrid work, onboarding through virtual meetings and the lack of in-person interaction has forced organizations to reconsider their development approach. Regular training and development programs will not only help employee retention by improving worker contentment, but can help them build new skills, methodologies and strategies that will ultimately lead to organic growth.
Create purpose with perpetuation, strong culture and internal mobility
In a recent McKinsey study, almost half of U.S. employees said that the pandemic led to them reconsidering their type of work. People who are aligned with their purpose at work tend to be more productive and more likely to remain with the organization. When more employees feel aligned with their companies’ purpose, there tends to be better engagement and loyalty.
According to research conducted by Glassdoor, top predictors of workplace satisfaction are the culture and values of the company, followed by the quality of senior leadership and internal mobility. Culture and values of the organization are attributed to about 23.4% of worker satisfaction in the highest income group in the 615,000 surveyed by Glassdoor.
One way insurance agencies brokerages can improve purpose is to have an effective and clear perpetuation strategy. If there is a well-planned ownership strategy for key staff, this can help create a strong feeling of purpose and motivation for the team. When leaders have a vested interest in the success and future of the firm, this can help drive performance and focus.
Improve producer compensation plans.
One highly effective way to boost talent retention and profit margins, while driving operational improvement, is to modify producer compensation plans. As the industry has changed, and firms have added services, capabilities, and a higher level of technical employees, firms can benefit from a more focused approach on refining compensation plans. There is not a one-size fits all producer compensation plan, but a firm should evaluate its cost structure, location, staffing needs, and long-term growth and profitability goals, and then develop an appropriate plan that delivers a sustainable return on investment to the risk takers (shareholders/partners).
Now is the time to start implementing strategies that will help your company hire and retain the necessary talent to thrive. Doing so will ensure that your firm stays competitive and high growth even as others are impacted by talent departures.
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