3 min read

Amid a Labor Crisis, Retention is Critical

Oct 21, 2021 10:27:00 AM

Last week, The Wall Street Journal reported that there are 4.3 million workers “missing” in the United States.  

It described that as the participation rate or share of the population 16 or older either working or looking for work. In February 2020, it was 63.3% of Americans; today it’s 61.6%. What’s more, even as American businesses have 10 million job openings, 4.3 million Americans quit their jobs in August, the highest since Dec. 2000.

Industries across the gamut are taking a hit, but those relying on hourly frontline employees – like manufacturing, hospitality and retail among them – are experiencing some of the highest rates of workers resigning ever recorded. And, as we head into the holiday season, they’re struggling to fill positions to meet consumer demand.

While there are temporary solutions to support quick, seasonal hiring efforts, companies need a long-term solution to reduce turnover. That’s why there never has been a more important time than now for companies to prioritize their efforts on employee retention.

ROI of Employee Retention

Reducing employee turnover not only will help solve staffing issues caused by the pandemic, but studies also show the return on investment can cut costs and increase sales.

Replacing an employee who leaves can cost between 50%-70% of their annual salary – recruitment, onboarding and training are pricey, but according to SHRM, most of the costs come from a reduction in productivity.

Maintaining a steady pool of employees also is great for improving customer relationships, increased productivity, company culture and a highly skilled staff with extensive knowledge about your business.

Employee Engagement is Key to Improving Retention

There is a correlation between employee engagement and retention. And it’s evident when you look at these stats. 

According to Gallup:

  • Engaged employees turn over 24% less than those who are not.
  • Organizations with an engaged workforce are 21% more profitable.
  • Highly engaged workplaces see 41% lower absenteeism.

Hubspot reports that employees say they’d work harder if they were better appreciated.

Consider this: Companies that had the best corporate cultures, encouraged all-around leadership initiatives and highly appreciated their employees, customers and owners grew 682% in revenue.

This is because engaged employees feel more valued and connected with their day-to-day workplace experience.

How Do I Increase Employee Engagement with My Frontline Workers?

The short answer: communication.

The first step in increasing communication with your frontline hourly workers is in how you deliver that communication. For our customers, texting works best.

Internal communications strategies aimed to reach hourly workers must start from an organizational level. Be sure these efforts align with your company’s mission – even if that means reworking it to include value in company culture and your staff. From there, encourage your frontline leaders to get involved and equip them with elements they’ll need to carry out messaging about open enrollment, COVID-19 procedures and anything more that will need to be communicated from the C-suite down. Involving frontline leaders is a critical piece – 70% of frontline engagement is determined by frontline leaders.

For companies with 1K+ employees, there are solutions for reaching employees at all levels directly on their personal devices. If you’re interested in learning more about how goHappy can elevate your internal communications efforts, reach out today!


Shawn Boyer

Written by Shawn Boyer

Shawn Boyer, Founder & CEO of goHappy.