The "Turnover Tsunami"
Businesses nationwide are hiring at a record pace. Employees are reevaluating their priorities, and looking for new positions that fit a post-pandemic lifestyle. Many report an altered value system shaped by a year of reflection. In fact, experts warn that a “tsunami of turnover” is coming at a time when competition for talent is fierce and many companies are still recovering from the financial impacts of the pandemic.
The pandemic magnified the critical infrastructure role that childcare plays in supporting parents, businesses, and the economy. At the start of 2021, ten million mothers of school-age children remained out of the workforce according to a report from the U.S. Census Bureau, an increase of 1.4 million over 2020. Many cited the need to provide care for their children as the reason for being unemployed.
In 2019, research from the Managing the Future of Work project at Harvard Business School found that nearly one-third of employees (32%) voluntarily left a job due to caregiving responsibilities at some point in their careers. Respondents cited factors such as the high cost of help (53%), inability to find quality help (44%), and the inability to meet their job requirements due to increased caregiving responsibilities (40%).
Turnover Comes at a Steep Price
For employers nationwide, a ripple effect of the pandemic is expected to become a wave of voluntary resignations. A November 2020 study by Ipsos on behalf of Eagle Hill found that 25% of U.S. employees plan to leave their current job as the pandemic subsides. A February 2021 survey from Achievers Workforce Institute found that 52 percent of employees surveyed in the U.S. and Canada planned to search for a new job in 2021, up from 33 percent a year before.
The overall disruption and financial impact of employee turnover cannot be overstated.
According to the Society for Human Resource Management (SHRM), direct replacement costs can be 50% to 60% of an employee’s salary, including recruiting, interviewing, hiring, orientation, and training new employees. Indirect costs, such as potential customer dissatisfaction, and lost expertise, can boost the total cost of turnover ranging from 90% to 200% of a worker’s annual salary.
Investing in People
Business leaders, economists, and policymakers are beginning to recognize that support for caregiving enables commerce and economic activity, making “human infrastructure” a critical issue to be addressed, particularly for women in the workplace.
In April, the current administration proposed the American Families Plan, which would provide funding for universal preschool and financial assistance for childcare and caregiving. While turning the plan into law will require an act of Congress, this recognition of the need for better support for working parents is significant.
To bring more focus to the need for caregiving assistance, over 200 organizations, including industry giants Google, Spotify, Verizon, and PayPal have joined the Care Economy Business Council. The coalition was created by the Time’s Up advocacy group, and member companies commit to providing caregiving support to their employees and working to champion and implement change for women in the workforce.
Attracting and Keeping Top Talent
Proactive employers can secure their talent base by following a familiar business strategy - offer something your competitors do not. The twist? Apply that approach to both recruiting new talent and retaining current employees. A key first step is listening to employees, understanding their challenges, and looking for solutions.
Prudential’s recent Pulse of the American Worker Survey showed that 66% of employees believe benefits are a more important consideration now than before the pandemic. Not only do these benefits increase employees’ peace of mind, but they are also critical when choosing whether to look for another position. According to the survey, more than 4 in 10 (44%) are more likely to consider taking a similar job at a different company that offers better benefits than they were a year ago.
The Achievers study confirmed the importance of addressing caregiving as one key to reduce turnover and attract new staff. One in four employees in the survey (25%) named work-life balance as the reason they would job hunt, with almost as many (23%) saying it was the main reason they would stay at their company.
Becoming what the Harvard study terms a “Corporate Care Leader” by providing a meaningful caregiving benefits package can be an impactful step in addressing the work-life balance and securing top talent.
About Tom Keller
Tom is Managing Partner for Kiddie Academy Educational Child Care Centers in St. Louis. The company offers Workplace Essentials, an employer-sponsored child care benefits program that helps St. Louis companies attract and retain top talent. Every Workplace Essentials partnership is designed to meet the organization’s needs and identify the solutions that will work hard for employees.
Start a conversation with us about how your company can offer childcare benefits with Kiddie Academy Workplace Essentials.