How to retain staff amid the turbulent economic climate of 2023

Employers may believe they’ve braved the ‘Great Resignation’, but in 2023 it’s set to be harder to hold onto employees than ever before.

The post-pandemic malaise that saw many quit their role has now given way to a number of underlying economic factors affecting the jobs market. A combination of the rising cost of living, soaring interest rates and slower wage growth is set to have more of your staff canvassing their employment options than ever before. 

With unemployment in Australia at record lows, not only will it be harder to find new staff, but it will also be more costly. All of this will in turn, also push salary demands from your incoming candidates. That’s also not factoring in training and recruitment costs.

Put simply: in 2023 companies will yield substantial savings from retaining talent rather than replacing it.

We work with over 300 companies around Australia and New Zealand helping them solve this exact problem. So here are our top tips for retaining talent this year.

Ensure your employees contribute meaningfully to your purpose

In our years working with companies, we’ve found that the happiest employees feel as if their work is both meaningful to them, and is clearly linked to the organisational goals. It sounds obvious, however, it can be hard to define what meaningful work actually means, as it can be different for every employee.

Some like to see the tangible business outcomes of their efforts, while others are motivated by the process of working with colleagues. Nobody likes to feel that their work is without impact or meaning.

Understanding the motivation of your employees and ensuring the work you offer, and the company’s values are aligned with the individual is a good starting point.

Regularly acknowledge and reward work

Most employers don’t have processes in place to reward and acknowledge good work. This should be more regular than an annual bonus and more structured than a passing compliment in the hallway. 

Poor recognition practices are detrimental to companies. A recent Gallup Study found that companies with a highly motivated workforce are 20% more productive and 21% more profitable than other firms.

Every company will manage this differently. It could be taking five minutes in a group meeting to call out the extra effort one team member took this week. It could be an email — either to the team or the individual — spelling out their efforts and thanking them. It really depends on your existing workplace processes. 

Again, any incentive should be tailored to the employee specifically. And in terms of regularity, the reward should be tied to the praise where possible. 

Focus on providing learning opportunities

According to Gartner’s latest 2023 HR priorities report, up to 44% of HR leaders believe that their organisation does not offer a compelling career path to their employees. While this sample focuses on larger enterprises, our experience strongly suggests the same is true for SMEs and startups too. Despite this, smaller businesses often have the flexibility and scope to offer greater hands-on learning and development experiences to their employees than larger companies.

In some instances, providing clear learning or development opportunities can be more enticing for retaining staff than providing a pay rise. The same can be true in reverse as well. If you are unable to provide opportunities for promotion and learning, you instead encourage talent to stay with an above-market salary.

Consider meaningful benefits and incentives in addition to salary

The era of flashy perks wowing staff is coming to a close. You won’t retain talent with a ping-pong table or an open bar. This is giving way to a more nuanced conversation about what perks actually matter for staff. 

For some, flexibility in the workplace is paramount. Others prefer opportunities for team building or social events. With the cost of living on the mind of employees, even perks like discounts on groceries or other household goods can be a valid incentive. A recent Perkbox research found that only 30% of business leaders have brought in measures to provide financial and wellbeing support. 

One size does not fit all when it comes to employee incentivisation. It’s worth having a chat with your team about what motivates them, and working backwards with perks to address it. 

It all starts with talking to your team and letting them decide

Perhaps the overriding point here is that all discussions around motivation and incentivisation in the workplace start with a conversation with your team and the understanding that everyone is different.

Even slight personalisation of rewards will put you ahead of the curve; a recent survey of business leaders run by Perkbox found that 31% of businesses are developing localised benefits that align with the needs of their employees. 

The trend of personalisation incentives and rewards in the workplace is gaining traction in Australia. It’s not a costly trend for companies, but it requires a change of thinking about how you actually engage and reward your team.