Many US companies are still battling high attrition rates, aggravated by a number of factors like the much-talked-about skills gap, the low unemployment rate, and the resulting ease with which competitors can win your employees over by offering them higher salaries, better benefits, and more enticing company cultures.
Interestingly, we recently saw that the technology industry is suffering the most. This can be explained, in part, by the high demand for data analysts, UX designers and software engineers and the correlating increase in compensation.
What about other industries? What are the reasons for high voluntary turnover rates across the board?
A lack of opportunity driving high attrition
People are driven by far more than their income. High performers want to grow. They want to master their jobs and know that they have a solid career plan and the ability to advance at your organization.
In fact, not too long ago, a LinkedIn survey of 10 000 job switchers revealed that the top reason (45%) for leaving their jobs was a lack of career opportunity and advancement.
While employees might be motivated by more than money, the cost of turnover can’t be ignored.
The high cost of voluntary turnover
We recently saw that the Work Institute conservatively estimated that, since 2010, costs linked to voluntary turnover have almost doubled from $331 billion to $617 billion, but the figure may in fact be much higher.
According to Gallup, US businesses are losing $1 trillion to voluntary turnover every year.
They also suggest that the cost of replacing an employee can range from one-half to two times that individual’s annual salary.
That’s just the financial cost.
We also know that losing great people can put a dent in productivity, team morale, client relationships and other facets of business that aren’t necessarily as apparent as the monetary implications.
Tackling high attrition rates with an internal gig economy
High attrition can be a complex problem to solve, but since we know that a lack of opportunity is one of the main driving forces behind voluntary turnover, we’ll zoom in on this for now.
The answer to curbing people’s boredom and a perceived lack of career growth at your organization may lie in creating an internal gig economy.
To begin with, let’s look at what a gig economy is.
The concept gained popularity in the 2008 financial crisis when unemployment and underemployment were rife. People were looking for temporary and flexible “gigs” to bridge financial gaps – and the trend has grown since then, largely due to technology and the number of work opportunities that can now be picked up via apps, like Uber.
In essence, the gig economy generally involves short-term engagements, such as freelance or on-demand work.
Smart companies are embracing the trend, realising that it’s better to have their own (experienced and onboarded) employees taking on extra projects than relying on external workers, or losing their employees’ creative input to other companies.
What are the benefits of an internal gig economy?
In an earlier blog, we noted that internal gigs create an ‘intrapreneurial’ environment, and are great for motivating top performers who are driven by an intrinsic desire to learn, grow and make a difference.
They allow your employees to gain experience in different disciplines and to learn new skills, without leaving your company, or at least without leaving as soon as they otherwise might have.
Developing an internal gig economy may also:
- Curb boredom – Creating an internal gig economy at your organization can help reduce attrition by giving your employees stimulating projects outside of their usual realm of work and responsibilities.
- Encourage skills development – It gives employees the chance to master new skills, and learn new software and processes.
- Help you identify high performers – A platform like this can help you identify and use key skills that you didn’t know your people had. This can unlock innovation, and even cost savings. For example, you might find a product developer who is looking to develop his / her videography or illustration skills – they may be keen to take on a project for the Marketing team!
- Foster collaboration – An internal gig economy provides the platform for employees to work with new teams, build their networks, and gain recognition outside their usual work environment.
- Provide an extra source of income – In some cases, an internal gig economy may even give your employees the opportunity to earn a bit of extra cash on the side while building up your business. It’s a win-win.
How to set up an internal gig economy
While the benefits may be clear, the actual roll out might sound complicated to you. How do you do it?
Well, the good news is that there is software – like ours – to help you create an easy-to-manage internal gig economy.
Our work allocation module functions very well as an internal gig platform. Managers with projects can simply list them on the platform, along with the skills required, duration of project, and outcome. Then, employees can browse through projects and bid to work on the ones they like. Once the manager selects his / her team, the project is started.
You might also like: What to look for when adopting an internal gig platform
The great thing about a platform like this is that managers and team members are able to provide real-time feedback to supplement that of the employee’s usual manager. This can be pulled into performance reviews for a less biased, fairer assessment of the employee’s performance, skills development, and team work abilities.
Don’t wait to see the effects of attrition in your organization – find out more about the solution, which has the power to underpin your internal gig economy, here.