Eight years is a long time to work in one place, especially in the restaurant industry where the average tenure is just over one and a half years. For Ricardo Juarez, that tenure may be coming to an end. Juarez, an employee at Brentwood, Tennessee’s Twin Peaks restaurant, walked out on his job alongside his colleagues after experiencing rude and hostile behavior from the outlet’s manager.
Like Juarez, employees everywhere are becoming increasingly frustrated with their employment relationships. Even as layoffs continue, quit rates in 2023 are still higher than the same period pre-pandemic in 2020.
While some level of turnover is healthy, when employees voluntarily leave, their employers often have little notice and have to pass the workload off to other workers to carry the burden. With the number of job openings still relatively high especially in industries like hospitality, the time to fill an open job can extend that burden for some time.
More news of layoffs complicate the problem even more as workers who remain may struggle to sustain productivity and positivity, sharing their perspectives on social media and review sites. And while layoffs may give companies a short-term profit or stock price boost, the long term effects are lasting and impactful.
Whether frustrated with being overworked, or pushing back against returning to the office, employees are becoming more steadfast in their frustrations and more vocal in their refusal to capitulate to employers’ demands.
Workers are striking in record numbers, which seems confusing in an economy teetering on recession. There were 23 of major work stoppages affecting more than 1000 employees in 2022 up 156% from 2009. And brands like Starbucks
Employees can also now rely on more wage options from the gig economy, and are more willing to make sacrifices to leave a challenging job than ever before. That gives companies talent whiplash: replacing open roles as quickly as they’re filling them.
The cost of all this turnover, including the time and cost to fill vacated roles has a jarring impact on the bottom line. This is particularly challenging in hospitality where employers can’t fill open jobs fast enough. A single, hourly, food service worker can cost over $5,000 to replace. Multiple that by a turnover rate of over 75% for a company with thousands of hourly workers. It’s a cost that cannot be ignored.
It’s easy to assume filling jobs means filling the pipeline–amping up talent acquisition and recruitment marketing efforts. These are important but short-term impacts that may solve the “butts in seats” problem as recruiters have long termed it, but they don’t address long term issues.
First is the change in population growth. In 1983 in the U.S., 13.1% of the population was between the ages of 20 and 34. While in 2023, that number dropped to 10% of the population. While the population size during that time grew, we’re not keeping up with the pace needed to support the growth and the birth rates continue to decline.
Second, business growth is outpacing the availability of talent leading to a skyrocketing number of open jobs. For example, the 1.6m hospitality jobs open in January 2023 represents 45% more openings than anytime in the two decades prior. Houston, we have a problem.
Last, for companies going through layoffs, you can’t ignore or condescend to the employees who remain. These employees are still delivering to your customers or clients, and they’re vocally sharing their employment experience on and offline. For employers who make this a priority, they maintain both positive brand perception and engaged employees even through challenging times.
First things first. How strong is the relationship between the employees and the employer? Organizations often have data on what employees value in an employment relationship, but they don’t know anything about their own relationships. It’s like reading about what most spouses want in a marriage, but not understanding what your own spouse wants or how one need might compare to another. The same can be said for employment.
Measuring the strength of the employment relationship can’t be done by asking if someone will refer your company to a friend or family member for a job. It has to be done by measuring the strength and stability of the relationship. At exaqueo we do this by looking at the four relationship dimensions of employment: your relationship with the organization, your leaders, your co-workers, and your work–the job you do. If any one of the four legs of this stool is broken, the whole relationship is at risk of being toppled.
For example, in one of our studies, over 85 percent of employees at the commercial real estate company CBRE reported that the organization’s core values and culture are very important to them. Yet only 7 percent prioritized their relationship with the organization as the most important. Values matter, but leaders and co-workers matter more. This can directly impact retention efforts and investments.
If Covid taught us anything, it’s that we can get bored easily. Employees need to see change in their work and progress in their careers to stay engaged and interested. According to LinkedIn’s Workplace Learning Report, employees who move roles within the first two years have a 75% higher likelihood of staying with the company for the long term.
Staying longer also means employees gain more expertise and experience. “The longer you stay with a company, the more you learn about your industry and role,” says Laurie Ruettimann, HR Consultant and Author of Betting on You. “This will make you more valuable to your employer and give you the confidence to take on new challenges.”
For employees who aren’t learning and growing, they’ll go find somewhere they can. LinkedIn also cited “opportunities for career growth within the company” and “opportunities to learn and develop new skills” as two of the top five most important factors people consider in evaluating new opportunities.
When there’s an increase in job openings, there’s an increase in attention to those openings whether through promotion of attracting new talent or the increase in referral programs. For existing employees, this can often make them feel neglected or undervalued. New hires may make more money or take roles that existing hires wanted.
On the other end of the spectrum, when the economy is impacted negatively, employees can feel scared, overworked, and under-appreciated as the company pushes to manage profits and growth during a challenging time. One way to manage this is by making it clear employees matter.
Much of the current retention advice focuses on short-term or obvious solutions like raising wages, offering flexible work options, or encouraging work life balance. These are table stakes, not long-term solutions.
What’s really impactful is thinking strategically about how to demonstrate commitment, and be held accountable.
Hospitality company Montage International anticipated this challenge and leveraged their employer brand, “All Because of You,” during and after the pandemic as a way to brand and market to both new and existing associates.
“Since we launched Montage International 20 years ago, our company has grown exponentially – from one resort in Laguna Beach to 14 resorts across two distinct brands with more in development,” says Mandy Holloway, the company’s EVP and Chief People Officer.
All Because of You,” reminds associates of how much they are valued, and is reinforced at every turn of the employment experience. This is shared to job candidates as a glimpse into what it’s really like to work there,” says Holloway.
This kind of position is powerful. Using an employer brandline like this means you have deliver on it in everything you do. It drives people strategy, alignment, and leadership accountability.
“[For us] it not only serves as an important recruitment initiative, but also a retention technique. Recognizing that in today’s market, retention is just as critical as recruitment, All Because of You strives to celebrate and reward each of our associates and the work, dedication, and camaraderie they bring to the organization.”
There’s no doubt the employment situation is uncertain–where employers can make an impact is by paying attention to the employment relationship, considering the bottom line impact of retention, and playing the long game.
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