3 Employee Retention Strategies for Staffing Agencies
By Adam Day
June 13, 2022
Staffing agencies have persistently high employee turnover rates. Employees are constantly going in and out the door, with a continuous stream of day workers, account managers, and recruiters who need on-boarding and training. Turnover is both inefficient and expensive, wasting time and money that the agency could be spending elsewhere more productively.
According to the American Staffing Association, the median annual turnover rate for staffing agencies is 25%, slightly higher than the 22% turnover across all U.S. industries. Account managers in particular are constantly coming and going, leading to damaged client relationships and lost lines of communication. What’s more, the cost of turnover can be debilitating, between the lost revenue from not being able to meet the clients’ staffing needs to the cost of recruiting and training new employees.
Since staffing agencies tend to be primarily focused on keeping clients happy, it’s easy for internal satisfaction to get overlooked. But as a staffing agency, it’s crucial to keep your employees engaged and satisfied. Happier employees mean a lower turnover rate, which is ultimately better for both their well-being and your bottom line.
Fortunately, with these three retention strategies, you can ensure that your best talent is sticking around.
Provide fair and timely compensation
It’s a universal truth: people want to be paid accurately and on time. In an understaffed labor market, with industries of all varieties desperately trying to fill vacancies, workers are not suffering for a lack of choice. If employees aren’t compensated fairly, and in an accurate and timely fashion, they will find another job situation.
One survey found that over 49% of employees will start job hunting after only two payroll errors. It’s therefore critical that employees are being correctly compensated for their hours.
One method to ensure accurate and prompt compensation is through use of time and attendance software. With such tech, employees can clock-in and out via smart kiosks or even mobile apps. Integrated software automatically logs the time that employees work, keeping track of hours so you don’t have to. The system then automatically determines total pay owed, factoring in overtime pay and different pay rates based on changing assignments.
The tech will also save you headaches and hassle down the road, as it can be used to settle any potential wage disputes that may arise: the hours are right there, set in stone, unable to be manipulated—especially when paired with biometric ID proof to prevent “buddy punching.”
Generation Z, those roughly born between 1997 and 2010, will soon make up over 30% of the workforce: this means you must be prepared for their arrival on the job market and bring your office environment up to speed with their technological prowess.
Keep in mind that younger people increasingly want to learn new skills in the job and are attracted to positions in which they can grow. One survey found that 80% of Gen Z workers surveyed are exclusively seeking job opportunities where they can acquire new skills or expertise. The number is particularly high compared to the 55% of millennials and 36% of boomers who expressed similar aspirations.
So, Gen Z is looking for a work environment that will propel them forwards into the future, not back into the Stone Age. So, consider ditching the pen and paper, and instead investing in the seemingly futuristic but nonetheless practical technologies like artificial intelligence (AI) and machine learning (ML).
AI algorithms can help your agency predict your clients’ needs in advance and identify the workers best suited to fill any future vacancies in the client’s business. It can also do wonders with data science, sorting through millions of seemingly nonsensical numbers to find useful, otherwise indiscernible patterns regarding efficiency. The opportunity to benefit from such tech can engage your younger employees while improving your overall efficiency and client satisfaction.
Offer incentives and rewards
To run a successful staffing agency, it’s essential that you foster a supportive and positive work environment. You want to acknowledge your employees’ hard work and make them feel validated.
Consider offering workforce perks like retention bonuses, paid parental leave, remote work options, and wellness retreats. The key here is to compensate your employees when they commit to your agency while providing them with the flexibility to maintain a better work-life balance, making them more productive and engaged when they are on the clock.
But it’s not just about money. Employee satisfaction surveys consistently show that, while compensation needs to meet a certain level of employee expectations, beyond that employees want to feel appreciated, recognized, and valued. Even in a staffing agency, it’s possible to create a culture of recognition, in which employees feel that they’re part of something worthwhile and are appreciated for what they contribute to the company’s overall success.
Employees are the lifeblood of any staffing agency. Whatever you can do to keep those employees happy and fulfilled will contribute to the company’s continued success.