Have you developed a successful retention strategy yet?

New data reveals that companies are waiting too long to combat the Great Resignation

Have you developed a successful retention strategy yet?

While American employers have ramped up hiring efforts to combat the nationwide talent shortage, not enough are focusing on retention.

More than 50% of contingent workers who prematurely ended their assignments in 2021 did so within the first two months of their engagement, up from 44% in 2020. Contingent workers are defined as freelancers, independent contractors, consultants, or other outsourced and non-permanent employees. Meanwhile, one in three workers quit within the first month.

That’s the data just released from PRO Unlimited’s Spring 2022 U.S. Labor Market Report. The San Francisco-based integrated workforce management platform provider manages data on hundreds of thousands of workers annually across more than 51,000 unique roles globally, providing insights on rates, skills premiums, efficiencies, candidate supply and demand, hiring competition and more.

“Recruiting and retention are two sides of the same coin,” said Dustin Burgess, general manager and senior vice president of total talent intelligence at PRO Unlimited. “While finding top talent is imperative, holding onto skilled people is essential for fighting the worker shortage. The market is tight and it’s only getting harder to source the right candidates. Employers that emphasize retention initiatives, proactively redeploy talent to fill key roles and create compelling worker experiences will gain a critical edge.”  

Read more: Successful onboarding is key to employee retention

Quit rates are especially high among software engineering advisors, application engineers, application developers, business systems analysts and software engineers. That’s no surprise because as many as 80% of tech workers are considering looking for another job, and more than half have actually applied for one in the past month, Blind reported. Almost three quarters (74%) of tech professionals have communicated with a recruiter and nearly half (49%) have already interviewed with another company in the past month.

The mass exodus of tech talent has been a product of the Great Resignation, in which companies across the United States are experiencing historic turnover. More than 50 million Americans have quit their job over the past year, according to the U.S. Bureau of Labor Statistics. The COVID-19 pandemic has forced people to reevaluate their priorities, and as a result, they’re seeking greener pastures. Employees want higher salaries, better working conditions, greater work/life balance and more opportunities to advance their career. With the scales tipped in favor of labor, employers are scrambling to fill positions.

In order to compete for talent during the Great Resignation, West Coast-based tech companies, especially those in Silicon Valley, are increasingly seeking talent away from the West Coast. The percentage of West Coast companies’ job postings throughout the United States jumped to 43% in 2021 from about 30% at the beginning of 2019, Bloomberg reported, citing data from The Conference Board. The percentage of computer and mathematical job postings also increased to over 40% in October 2021 from more than 30% in April 2020 and around 35% in October 2018.

Given recruiting costs, skyrocketing inflation and steady market competition, holding onto talent is just as important as recruiting new workers to fight the labor shortage. Employers should emphasize communication and feedback immediately after an assignment starts, rather than waiting until the 90-day review that’s common across many industries.

“Record-high inflation rates and job openings will continue to complicate the talent landscape,” Burgess said. “A data-based strategy that enables organizations to make fast, informed and cost-effective workforce decisions is now more important than ever. The deep visibility that actionable intelligence delivers helps employers not only identify and engage the right workers but also understand their retention risk and where to focus to reduce attrition.”

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