How to Keep Your Best Employees: A Guide for Employers in Today’s Tight Labour Market
13 December 2023
Welcome to the first installment in our new, comprehensive series exploring the Canadian labour market’s ongoing challenges. In this series, we will delve into the persistent labour shortages, examine how employers are grappling with retention & attraction issues and provide effective strategies being employed to navigate this complex landscape. Today’s post lays the foundation by dissecting some popular reasons behind the labour shortages, why they are likely to persist and setting the stage for a deeper exploration in our subsequent articles.
In recent years, Canada’s labour market has faced a significant and persistent challenge in the name of labour shortages, due to a combination of demographic, economic and policy-related factors. A significant contributor is the ageing population, leading to a higher retirement rate and shrinking workforce. Adding onto that, rapid technological advancements & evolving industry needs have created a skills misalignment where the skills of the labour force do not fully align with the emerging job requirements and immigration as a key driver of labour force growth in Canada, has faced disruptions further exacerbating the issue.
Looking to the future, these shortages are likely to persist given the ongoing demographic shift towards retirement age, AI integration & evolution of industries or new sectors, growing skills misalignment (unless significant investments in education and training are made) and these factors, combined with potential fluctuations in immigration trends and policy changes underpin the need to comprehensively address how to attract and retain talent in an increasingly competitive job market.
Knowing all that, understanding why employees leave and what attracts them to other companies is key to keeping your workforce happy and productive. Let’s dive into the five main reasons employees are walking out the door and how you can turn these insights into strategies for better retention and attraction.
First, let’s take a look at the main umbrella concepts of what attracts an employee away from Company A to Company B:
- Competitive Compensation
- Job Security
- Career Advancement
- Flexible Work Policies
- Positive Company Culture
Second, let’s acknowledge that knowing the above doesn’t necessarily translate easily into crafting policies that work for both employer & employee, so with that in mind, we’ve put together a brief how-to guide for employers looking to retain & attract top talent based on the pain points above:
Career Development and Advancement Opportunities:
Employees crave clear career paths and advancement opportunities. Here’s how you can provide them:
- Create Clear Career Paths: Develop and communicate clear career progression opportunities within your organization.
- Recognize and Reward: Implement a system to recognize and reward employees for their hard work and achievements.
- Tailor to Employee Groups: Understand that different employee groups have varying needs. For example, middle managers might prioritize career development, while senior managers look for a mix of remuneration and lifestyle benefits.
By addressing these diverse needs, an employer isn’t just filling positions but building careers.
Work-Life Balance & Company Culture:
A positive company culture & a healthy work-life balance are more than just perks or buzzwords; they’ve become the pillars of employee satisfaction. This means rethinking rigid policies, especially regarding work locations, and accepting that flexibility is no longer a trend but a shift in how we define productivity & satisfaction at work. Here is how an employer can reasonably address them:
- Encourage Work-Life Balance: Implement policies that allow employees to balance their personal and professional lives effectively.
- Cultivate a Positive Culture: Build a company culture that aligns with your employees’ values and makes them feel valued and respected.
- Reconsider Return-to-Office Mandates: Be flexible with work locations. Many employees prefer the option to work from home.
Workload Support:
The line between challenging and overwhelming work is thin and it’s essential to manage workloads with empathy to avoid burnout and employees feeling unsupported.
Here’s what you can do:
- Manage Workloads: Ensure that employees’ workloads are reasonable and sustainable.
- Provide Support: Offer resources and support for employees who feel overwhelmed or stressed.
Financial Incentives:
In an era of rising living costs and rapidly shifting demographics, financial considerations are more critical than ever. Here’s how employers can show they value employee contributions and understand their needs:
- Review Compensation Packages: Regularly review and adjust salaries to reflect the current cost of living and inflation rates.
- Job Stability: Foster a stable work environment where employees feel secure in their roles.
Work Environment:
Flexibility in work location and a supportive environment are key to employee satisfaction and for many, the pandemic has reshaped views on office work. The flexibility to choose their work location is not just a benefit but a necessity. Here’s how to negotiate the push-pull around the issue:
- Flexible Work Options: Offer flexible working arrangements, including the option to work from home
- Positive Office Environment: If you require employees to return to the office, ensure it’s a space where they feel happy and productive.
If you’re planning to bring employees back to the office, think about ways to make the office a place they’re excited to come to, not just somewhere they have to be without understanding the reasons. Make sure that being in the office is truly essential.
Knowing what attracts employees to other companies can give you an edge. Competitive compensation, job security, career advancement opportunities, flexible work policies, and a positive company culture are often at the top of the list. By aligning your strategies with these factors, you can not only retain your best talent but also become a magnet for new talent. TWIG’s JobsTO resources can help job searchers find employers with competitive compensation by industry and occupation, and also function as a resource for employers to research how competitive they are with other companies and adjust their offerings to prospective talent accordingly.
Navigating the challenges of today’s labor market is about understanding and addressing the multifaceted needs of your workforce. It’s about building a workplace that’s not just a place to work, but a place to grow, feel supported, and be part of a community. Remember, when your employees thrive, so does your business.
