The beginning of this year saw a range of new data released that has ramifications for the employee experience segment. 2023 may shape up to be a year of mismatched expectations as employees continue to move on to greener pastures, hiring and recruiting are challenging, and budgets are strained.
First, a look at US-based labor data:
- The December 2022 US Bureau of Labor Statistics (BLS) showed an employee quit rate of 2.7%, which has been fairly stable over the past few months. The quit rate as defined by the BLS, is the number of employees who quit during the entire month as a percentage of employment. 4.1 million employees quit their jobs that month.
- The quit rates were highest in Leisure and Hospitality (5.1%) and Retail (3.9%).
- According to the BLS, there were 11 million job openings on the last day of 2022, with 5.7 million people being unemployed. That equates to 1.9 jobs available per unemployed worker.
- The recently released jobs report showed that the US economy added 517,000 jobs in the month of January with gains in restaurants and bars, retail stores, healthcare facilities, professional and business offices, and construction. In addition, the unemployment rate is at 3.4%, the lowest rate since May 1969.
- Labor force participation sat at 2.4% in January 2023, a bit higher than it has been, but still below pre-pandemic levels.
What does this equate to? The labor market is still in a state of flux. The Great Resignation has not really gone away but is holding steady. And with low unemployment and high job openings, employees have many prospects and are not necessarily feeling trapped in their current situation but are eager to move on to higher pay and work environments that are a better fit. Companies will need to work hard not just to recruit new employees, but also to keep the ones they have.
This collides with some other recently released reports that show poor employee engagement and low satisfaction with limited plans and budget to address it.
The Society for Human Resources Management (SHRM) Research Institute released its 2022-2023 State of the Workplace Report, which showed that 80% of HR professionals are concerned about how the economic situation may affect their organizations and almost half (48%) worry about budget cuts. In this same survey, only 46% of workers said they would recommend their organizations as great places to work.
Johnny C. Taylor, Jr. SHRM, SCP President and CEO, SHRM says, “Based on this report, 2023 is going to be a pivotal year for both employees and executives. We expect to see big changes in regard to budgetary concerns – while still considering talent and retention challenges.”
This tracks similarly to surveys released focusing on front line workers. A WorkJam study conducted by Forrester found that in the retail segment, companies are still short on frontline staff, with 65% operating at a deficit. However, only 8% plan to invest in making the frontline experience better in the next 12 months.
The WorkJam study also found that 80% of decision makers across industries and geographies want to use technology to improve the frontline experience, but struggle with prioritizing digital investments. Seventy-one percent of all leaders surveyed worry that investment in technology that improves processes and efficiency is taking precedence over tech that creates a better frontline employee experience.
“Focusing on the frontline employee experience is key to achieving business goals, including growing revenue, engaging and retaining associates, increasing efficiency, and ultimately delivering an excellent customer experience,” said Steven Kramer, CEO of WorkJam. “This survey shows that business decision makers across retail and many other industries want to improve the frontline experience through digital innovation—and understand that doing so is key to their overall business success—but are struggling to prioritize investments in technology that empowers frontline workers and makes their daily work lives significantly better.”
Another frontline worker survey conducted by Workday also points to expectations of workers and what could happen when those expectations are not met. Frontline workers want access to the right tools and technology, to feel a sense of belonging, and to be supported by their managers. Additionally, workers want to be recognized for their work and have opportunities to share feedback. Twenty percent of frontline workers plan to leave their jobs within the next three to six months.
“The last few years have placed a significant amount of pressure and demand on frontline workers, yet organizations continue to face challenges in supporting and retaining this critical segment of the workforce,” says Mariana Santiago, GM workforce and payroll, Workday. “The survey uncovered that experience is at the very core of frontline worker engagement and retention.”
When taking into account the BLS stats showing high quit rates in travel and hospitality and retail, two front line occupations, this does not bode well for the year ahead in those sectors.
Dash Research believes 2023 will be a year that will force tough choices across all industry segments when it comes to employee experience. However, companies face high risks in neglecting investment in this area. Focus areas such as training, development, and upskilling as well as recognition, rewards, and wellbeing programs should be looked at, in addition to technologies that help employees do their jobs more easily and enjoyably. Companies should ensure they have tools in place to (at a minimum) listen to their employees and analyze feedback as a way to find priority areas to work and serve as an early warning system for attrition.
Author Information
As a detail-oriented researcher, Sherril is expert at discovering, gathering and compiling industry and market data to create clear, actionable market and competitive intelligence. With deep experience in market analysis and segmentation she is a consummate collaborator with strong communication skills adept at supporting and forming relationships with cross-functional teams in all levels of organizations.
Sherril holds a Master of Business Administration in Marketing from University of Colorado, Boulder and a Bachelor of Arts in Psychology from Rutgers University.
