The New Way Employers Aim To Retain Talent

Workforce Stockpiling

Following unprecedented waves of layoffs in recent months, you might be surprised to learn of a new trend among employers in response to the tumultuous labor market: workforce stockpiling.

Workforce stockpiling — sometimes called “labor hoarding” — is essentially a retention strategy. Rather than cutting costs through layoffs, some employers have opted to invest in employees instead, in order to keep them from actively seeking different opportunities.

This defensive strategy has been employed by a variety of businesses to keep pace with the rapid changes, born from the need to combat persistent labor shortages and buffer against a potential economic downturn.

Battle for Talent

The workforce landscape is especially tough for small and medium-sized businesses, or SMBs. With typically lower cash reserves and hiring reach, these companies must fight to remain competitive amid potential labor shortages.

According to a survey conducted in 2022, a whopping 91% of SMBs were actively implementing workforce stockpiling tactics, with 89% planning to continue the same approach in 2023. And small businesses are twice as likely to pursue employee retention as larger companies.

Costs aside, the retention of existing talent may be more valuable than the gamble of acquiring new workers, particularly for SMBs. Workforce stockpiling can also help these companies cut back on hiring and training costs. Morale concerns and confidence in the existing team were also commonly cited as drivers of the trend.

Workforce Win

As an employee, workforce stockpiling could translate to a variety of benefits. Retention strategies may include higher compensation, more opportunities for connecting with leadership, flexible remote work options, and more paid time off.

In the end, workforce stockpiling could create a winning situation for both the talent and the companies. For employees, this is an opportunity to be recognized and better compensated. For companies, workforce stockpiling provides a strategic way to meet business objectives while maintaining financial stability.

Ultimately, this shift in strategy is a refreshing take in a corporate world recently marked by mass layoffs. If it continues to gain steam, it could redefine relationships between employers and employees, creating a more stable and traversable landscape for both.

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