Addressing Worker Retention and the Skills Gap

If you conduct an internet search on Labor Shortages, the headlines are alarming. According to the U.S. Chamber of Commerce, there are currently over 10 million job openings in the U.S. There are a lot of jobs, but simply not enough workers to fill them. Some experts predict a global talent shortage of more than 85 million workers by 2030.

Every industry is grappling with this challenge. For manufacturers, a skills gap – the disconnect between the knowledge and skills employers need and employees’ skills – is adding to labor woes. The skills gap is created by factors such as:

• Aging workforce
• Advances in technology
• Slowing population growth
• Manufacturing not being considered a career path

While much attention is often placed on recruiting new employees, retaining employees may be one of the most effective strategies for addressing the worker shortage and the skills gap. In addition to compensation and benefits, many factors play into employee retention:

• Employee involvement and ensuring employees understand how their efforts contribute to the company’s success. Empower workers by giving them a voice in decision-making and encouraging them to work together.
• Formal employee development plans that clearly outline career advancement paths, crossing training, and opportunities to grow through special project involvement. Job training and career development programs help employees expand their knowledge and skills, improving worker retention and addressing the skills gap. Partnering with local schools to provide apprenticeships, internships, and other forms of training will help workers acquire the skills they need to succeed.
• Employee recognition and a supportive organizational and community culture. Reward and recognize employees both individually and collectively for their contributions. Social activities, community involvement, and relationships with local schools strengthen connectedness.

Compensation and benefits remain top priorities for today’s workers, creating a competitive environment for organizations to vie for talent. To improve retention rates, it’s essential to understand that higher compensation without benefits that enhance employees’ lives may not be enough to keep workers from leaving. Only when competitive wages and meaningful benefits work together will your retention rate improve.

Employers have an opportunity to support their workforce through their employee benefits program. Consider:

• Flexible work arrangements that support work-life balance.
• Health and welfare benefits, including financial wellness and employee assistance programs that promote physical, mental, and financial well-being.
• A retirement savings plan, such as a 401(k). If a plan is not currently offered, take advantage of the tax credit available for starting a retirement plan or joining a multiple employer plan (MEP) or pooled employer plan (PEP).
• Offer benefits to part-time workers, including health insurance and retirement plan benefits.
• Promote the benefits offered throughout the year to increase awareness.
• Adopt diversity, equity, and inclusion business practices, including an age-friendly workplace.
• Assist employees nearing retirement by providing education about retirement income strategies, retirement distribution options, and the need to plan for the unforeseen. Also, provide information about Social Security and Medicare.
• Create opportunities for workers to phase into retirement, such as allowing employees to transition from full-time to part-time, work in different capacities or locations, or have a more flexible schedule.

Employers can stay one step ahead by understanding today’s labor challenges and monitoring talent trends, which can inform strategies to meet the unique needs of current and prospective employees.