Top 15 Ideas to Help Your Business Recruit and Retain Talent

A version of this article originally appeared on principal.com. 

Two words loom large in the minds of employers: recruit and retain.

The labor market has chugged along in the face of economic volatility and persistent inflation. Principal’s research in May 2022 found that 36 percent of employees say that as many as three in four of their co-workers are looking for different jobs.

Businesses have felt the strain of this sustained retention effort. One-third of small and midsize businesses (SMBs) are spending more time recruiting compared to a year ago, according to the Principal Financial Well-Being Index^SM and its March 2022 survey of 500 employers.

So how do you get the talent you need in a tight labor market?

These 15 recruiting and retention strategies are ranked in order of popularity based on responses from business leaders nationwide surveyed in the Well-Being Index. Some strategies, such as adding benefits, may pack more efficient power to recruit and retain than you realize.

1. Offer flexible work schedules or more time off.

“Flexibility has become table stakes at this point,” says Peggy Shell, a business owner whose Colorado recruiting firm, Creative Alignments, navigates the job market for a variety of clients. Be clear with employees about the boundaries of flexibility and watch for any impact to their motivation and engagement.

 2. Encourage more remote/hybrid flexibility.

“If you don’t offer this flexibility, you’ll have fewer candidates, even in the executive ranks,” says Michael Anderson, head of talent acquisition for Principal. At the start of 2022, 61 percent of employees with a workplace outside their home still chose to work at home.

 3. Advertise open positions.

Build a compelling and consistent online brand for your business across social media, Anderson suggests. Personalize your recruiting pitch and differentiate yourself from competitors.

On the ground, ask your employees and hiring leaders to get involved with key local and industry networks–don’t leave the talent search only to recruiters. Core managers can be the most effective ambassadors, attracting interest by showcasing their authentic enthusiasm for your company’s  meaningful work.

4. Raise wages for most employees.

Wages during the last year have risen at their steepest rates in decades (as seen via the Federal Reserve Bank of Atlanta’s Wage Growth Tracker). Employees themselves, according to May 2022 Principal research, say they’re attracted to other jobs or retained most of all by more pay. But this list has 15 strategies for a reason: Take note of your options besides cash to support and retain employees.

 5. Create clear paths for career growth.

Recruiting and retaining belong together as a two-pronged business strategy: You can’t afford to lose employees as quickly as they come in. Many modern organizational charts are flat, often making it difficult to carve out clear career paths for all employees. Watch out for “over-privileging” managers (giving them easier, quicker steps to promotion) as just one example of how career growth affects retention.

6. Adopt higher starting wages for new employees.

There’s no denying that compensation remains a key driver, Anderson says. The smaller your budget (and often, the smaller your businesses), the more you may need to market your company culture and employee experience. Stay disciplined with structured interviews in which candidates for the same job answer similar questions relevant to the work. “Making the right hire is key to getting the most out of your investment,” Anderson says.

7. Set higher wages for only specific jobs.

Many companies rely on the expertise of key employees they’d like to retain — because these employees tend to have a larger impact on business success. Explore a key employee benefit solution as an option.   

 8. Increase quality of current benefits.

Seventy percent of small and midsize businesses (with fewer than 500 employees) say employee benefits help recruit, and more than 70 percent say they help retain, according to the 2022 Principal Business Owner Insights survey. Cost can be a factor, so figure out what it really costs to add more benefits. Benefits may be more affordable than you think, especially compared to trying to compete with higher salaries.  

9. Add or increase bonus pay.

Bob’s Red Mill, a global manufacturer of whole grain foods in Oregon and a Principal client, is an example of a company that provides monthly profit-sharing to enable short-term financial security for employees, while its overall structure as an employee stock ownership plan (ESOP) generates long-term financial security into retirement.

10. Award sign-on bonuses to new employees.

A sign-on bonus can sweeten the incentive of competitive pay. But that money ultimately may not motivate as much as an employee simply loving their job, Anderson says. Genuinely happy employees can help boost overall morale.

Trey Winthrop, CEO of Bob’s Red Mill, says that this basic sense of fun can be an underrated quality for a workplace. It’s a difficult metric to fit into a spreadsheet, he admits, but he sees it reflected in the quality of job recruits and employee retention.

11. Train employees for crucial open jobs.

The tight job market has inspired more efforts to reskill midcareer workers, such as training employees with no tech experience in business intelligence and data analytics. But this can be a major undertaking, Anderson says, both in the development of these programs and the motivation or ability for employees to learn and apply the new skills. Depending on circumstances, it may be easier to recruit the necessary talent.

12. Expand fully remote jobs so employees can relocate.

In a candidate-driven market, Anderson says, meet your talent where they want to be met. In a post-pandemic world, the ties to community, a home, family, and friends can be hard to overcome with a job offer requiring relocation, considering the abundance of remote work options.

13. Offer referral incentives for employees.

Employee referrals often provide a steady pipeline of job candidates for businesses of all sizes. However, depending on the diversity of your workforce, referrals may be the least inclusive recruiting method, Anderson says. Reach out to community and professional networks and, if your business has them, your own employee resource groups.

14. Add new benefits.

Bob’s Red Mill several years ago expanded its employee benefits with a new array of what it calls “lifestyle benefits”: $2,500 of dependent care, tuition reimbursement, a scholarship program, and more. Ensure any new benefits match the unique needs of your employees by simply asking them what they are. Listen carefully and keep asking over time, because employee needs evolve.

15. Offer fully remote jobs to recruit from a wider geographic area.

If a local workforce footprint remains at least somewhat important to your business, you have options. Think of it this way, suggests Anderson: Keep your employer brand strong in your local market to maintain core recruiting; then pick which roles you offer as fully remote based on the availability and location of skills you want to target.

What’s next

• Compare your employee benefits with those offered by similar businesses with the Principal® Benefit Design Tool.

Creative Alignments and Bob’s Red Mill are not affiliates of any company of the Principal Financial Group

This article is intended to be educational in nature and is not intended to be taken as a recommendation. ​

Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Company. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., member SIPC and/or independent broker/dealers. Referenced companies are members of the Principal Financial Group, Des Moines, IA 50392.​ 2022 Principal Financial Services, Inc. 

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