Adjusting Your Management Style for a Tighter Job Market

National unemployment recently reached 5.3%. In 15 states, unemployment is at or below 3.5% (pretty much anyone’s definition of full employment). But now that it’s so much easier for people to find jobs, it’s becoming much easier for people to quit jobs. People are voluntarily leaving their jobs at the highest rates since 2008. This year, we’ve seen about three million quits each month, accounting for more than 50% of all job turnover.

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So it’s becoming more and more important to adapt your management style to focus on retaining employees. According to a paper by Rodger Griffeth, Peter Hom, and Stefan Gaertner which compiled and analyzed the results of 42 studies of turnover in different industries, most of the benefits that are designed to keep workers happy don’t actually have much of an affect on retaining employees. Especially as employers start having to compete to recruit new hires, the salaries, bonuses, and benefits packages that companies offer their workers don’t really matter very much. Unless you pay a worker a substantially higher salary than he or she is worth, the employee can usually find a similar offer somewhere else.

The same is also true of the small, inexpensive perks that companies like to offer employees. Extras like increased parking, flexibility with hours and lunch breaks, and small cash bonuses can certainly have a short-term effect. But people quickly get used to them, then they begin taking them for granted, then they just get angry when they aren’t offered (this is just part of human nature, as Louie famously discussed). Even tying vacations, bonuses, and stock options to seniority is ineffective- companies trying to steal away a worker will often just find out what his or her current employer promises them, then offer more.

Some of the strongest predictors of employee loyalty are job tenure, family status/marital situation, and age. Older employees with children who’ve worked at the same place for a long time rarely quit. So, you should try to hire 45 year olds who are married, have kids, and have been working at your company since they got out of college.

But, failing that, the biggest correlates for worker retention come under the labels “Relationship with Supervisor” and “Role Clarity.” It’s much harder to quit a job if your boss is a friend or family member. Then again, you can’t only hire friends and family. Management should try to have warm, open, personal relationships with employees, but it would be impossible to exclusively hire people you’ll get along with well.

Role Clarity, then, is the more feasible concern to focus on. Workers are more loyal to companies where their job requirements are well-defined and closely match what they expected when they accepted their offer. When workers’ responsibilities are constantly shifting and are different than what they expected when they were hired (“I never knew X was part of my job!”), they leave.

It’s easy to see why Role Clarity issues might snowball, especially at smaller firms. Employee A is unhappy that her duties keep changing, so she quits. Since the firm didn’t have many employees to begin with, every other employee has to pitch in to fill the now ex-employee’s roles while management hurries to fill her job. Now, Employee B is disgruntled that he’s suddenly performing a whole host of new tasks that were never supposed to be part of his job requirements. So he leaves. Then there’s even more work to be distributed between even fewer employees. It can be a terribly vicious cycle.

When hiring and on-boarding a new recruit, it’s essential to be list the position’s roles as clearly and as exhaustively as possible. But, of course, those responsibilities can change quickly (as my hypothetical illustrates). It’s essential to try to predict any changes to employees’ roles as early as possible, explain to them what’s changing and why, and make sure they’re able and willing to take on their new duties.

Still, occasional worker dissatisfaction is inevitable. Building on Griffeth, Hom, and Gaertner’s research, Dr. David Allen of the University of Memphis notes that there’s an extremely high positive correlation between “Search Intentions” and quitting. In other words, employees who start to think about leaving their jobs almost always start looking for openings, and (especially in today’s market) they usually find a new position and switch jobs. That means it’s essential to constantly, actively monitor your employees’ job satisfaction and redress an employee’s grievances before they even start to think about maybe starting to look for something new. If you can preempt any problems, your employees won’t even get the chance to start thinking about going elsewhere.

Written by

Nash Keune covers hiring and the economy for ZipRecruiter.

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