Retention Strategies: The Chameleon of Workforce

The move from a command economy to a market-driven economy combined with a new generation entering the workforce creates the perfect opportunity to update retention strategies. A renewed focus on retention strategies that aligns with the growing demand of the market and the needs of a diverse new workforce will help to improve sustainability in the clean jobs sector. Workers are in high demand and have clear expectations for what they want from employers. They are prepared to move to new opportunities if those needs aren’t met. As the market for talent narrows, employers must implement systemic approaches to recruitment and retention. We are all familiar with career maps, pathways, and development strategies for employees, but employers need a roadmap for recruitment and retention. Employers also need a guide to hire the right people, with the right skills, for the right job and a plan to develop those people over time.

Recruitment strategies to meet this growing demand are critical.  According to the National Association of Manufacturing Skills, “tradespeople leave jobs at a rate of 2.5 times more than other employees”, which begs the question, are retention strategies even more important?  Salary and benefits are no longer the only two factors for employees when considering their tenure with an employer.  Key factors such as demonstrated respect, communication and feedback, training and professional development hold significant value in today’s workforce market. As younger workers enter the workforce key factors in retention strategies will need to be flexible to meet their growing interests. Work Life balance, feeling valued and trusted, positive work environments, and investments in their future top the list of factors impacting retention for younger generations.  Let’s dial out and look at the pros and cons of retention strategies and why it’s becoming the linchpin of workforce development best practices.

The Big Picture

According to E2, the clean energy industry grew by 4% in 2022, equivalent to 127,000 jobs. This growth was a 10% increase from 2021. E2 noted that 40% of all energy jobs in 2022 were clean energy, a growth pattern 53% faster than the overall US economy. The growing investment in clean energy, diversifying the workforce, and renewed support for apprenticeships have contributed to growth in the sector. According to Mordor Intelligence, government support, additional subsidies, and a decline in solar panel costs are expected to drive the market. Tax credits and grants have helped to reduce the cost of renewable energy installations, which helps to drive market growth.

Meeting this growing demand presents a variety of challenges.  Where to invest resources to yield the strongest returns, staying viable in a competitive market, and retaining the dollars invested in your workforce are all valid concerns for both large and small contractors alike. How to best leverage the federal options available, access quality education and training for your employees, and diversify your workforce at the same time can seem overwhelming.  Interstate Renewable Energy Council (IREC) works to bring key stakeholders together to leverage promising practices, provide technical assistance, and lead industry training and accreditation.

IREC launched Green Workforce Connect, a new platform to connect job seekers, students, and contractors to local training providers and employers. As the industry grows, Green Workforce Connect aims to hire a new generation of home energy professionals. With a strong focus on diversity, equity, and inclusion, Green Workforce Connect will connect job seekers to training, and employment opportunities ensuring the clean energy workforce reflects the communities that are served.

In 2019, International Renewable Energy Agency (IRENA) noted that 32% of the renewable energy workforce comprised women, but mostly in administrative roles. According to the 13^th Annual National Solar Jobs Census 2022, “women made up 31% of the solar workforce in 2022, an increase from 20% since 2017”. This trend suggests room for improvement for recruitment, as well as retention strategies to keep women in the clean energy workforce. IREC’s report noted, “Black solar workers made up 9% of the workforce in 2022, while the percentage in the overall workforce is considerably higher, at 13%. Hispanic or Latino employees made up 22% of the solar workforce in 2022, compared to 19% in the overall U.S. workforce.”  Green Workforce Connect is structured to bring increased awareness of clean energy opportunities, connect jobseekers to the next steps in their journey, and provide resources for training providers and employers to created increased sustainability in the clean energy workforce.

The cost of poor retention strategies can range from $17,000 to $38,000 to recruit and train new employees. More than just financial loss, the intangible loss of institutional knowledge can be devastating. The increase in the number of retiring workers drains the remaining workforce until reinforcements are hired. Graf (2021) states that an estimated 31 million skilled trade workers retired in 2020. Dr. Ashdown, Dean at Hudson Valley Community College, noted, “Ten thousand baby boomers are retiring daily” and employers are finding it challenging to find qualified replacements. According to the 13^th Annual National Solar Jobs Census 2022, “The hiring challenge grew more pronounced in 2022, when 44% of solar industry employers said it was “very difficult” to find qualified applicants—the highest such percentage ever recorded in the Solar Jobs Census. Overall, 90% of all solar firms and 97% of solar installation firms said it was either “very difficult” or “somewhat difficult” to find qualified workers.

The generational shift in the incoming workforce will require adjustments in workplace culture. Younger workers value collaboration and work-life balance. According to Monroe (2010), millennials are driven by upward mobility and benefits. Authors noted that younger generations work to live, not live to work. Twenty to thirty percent of employers found it difficult to find qualified workers, due to lack of experience or credentials. Meeting the labor market demand will require flexibility of thought as well as diverse and inclusive outreach strategies. Significant resources have been put into place to support diverse, inclusive, and equitable recruitment strategies to expand and diversify the clean energy workforce. To continue that momentum, the same practices will need to extend to retention strategies as well.

Race – Why it Matters

Why should employers consider the race variable? Workplace diversity is a good business decision. According to the Harvard Business Review, diverse companies perform better financially than their less diverse counterparts. Of 366 public companies examined, the top companies that were the most varied (race or ethnicity) were 35% more likely to have financial returns above the mean-increased diversity led to fewer errors, more robust decision-making strategies, and increased innovation.

Embedding Diversity, Equity, and Inclusion into the workplace allows companies to gain a nuanced understanding of organizational development, recruitment and hiring, and retention and development. The Diversity, Equity, Inclusion Insights Report (2023) revealed, that organizational development provides an opportunity for companies to assess if their DEI statement reflects the mission of the organizations, recruitment and hiring allows companies to communicate the value of DEI and understand the impact of bias in the hiring process, and retention and development allows organizations to evaluate and ensure pay equity procedures are transparent and in place to ensure an effort is being made to retain Black, Indigenous, People of Color (BIPOC) and Latino/a talent.

To retain talent, transparency is paramount. It has been proven that employees seek transparency around recruitment, advancement, and compensation policies. DEI in the workplace (2024) states, “it is not as simple enough to hire a diverse workforce, but it is important that all employees have equitable access to salary and benefits, resources and advancement opportunities, and to have a voice within their teams and organization.” To improve employee retention, companies must build a culture based on inclusivity. CNBC/SurveyMonkey Workforce Happiness Index (2021), found that “a large majority of those surveyed (78%) say it’s important to work at a company that makes diversity and inclusion a priority, and more than 50% consider it to be “very important.”

Skills, Training, & Challenges – Don’t Skip Steps

Creating a holistic approach to workforce development includes labor market analysis and gap analysis to assess the educational and training needs to meet the identified labor demands. However, it doesn’t end there. Understanding your workforce capacity, the needs and barriers that may hinder workforce growth, and how to leverage the resources available to continue to grow the workforce beyond the hire are all critical to long term success in employee retention.

Converging the labor market timeline needs with the length of time quality training or apprenticeship is the math of workforce development. Labor market analysis plays a role in the employee’s professional development trajectory. Identifying career pathways and professional development resources for employees goes a long way towards employee retention. Employees find value in understanding the pathway for upward mobility and resources provided to them to achieve those steps yield returns on those small investments. Barriers to training and continuing education don’t end once hired for most diverse communities. Creating flexible options, providing soft skills training, and allowing employees to have a voice within the workplace goes a long way to building trust and respect among employees.

Solutions

Collaboration is the key to building sustainability in a changing market. Leveraging resources to amplify the once-in-a-lifetime comprehensive support from the federal government will help create huge strides in retaining the next generation of workers. Adapting to generational and cultural differences will be just as important as adapting to new advanced technologies in the industry. Take advantage of the technical assistance available and replicate best practices from other employers, stakeholders, or industry leaders. IREC is dedicated to creating increased awareness about clean energy jobs but is also committed to providing the technical support to maintain retention and growth in the industry; from apprenticeship technical assistance and accreditation and credentialing programs to the National Clean Energy Workforce Alliance, there are a host of opportunities to help bring folks together, connect the dots, and help communities transition to a clean energy future.

Dr. Cynthia Finley and Dr. Janell Hills-Thomas will be speaking at BPA’s upcoming National Home Performance Conference & Trade Show taking place in Minneapolis, Minnesota from April 8-11. Their session, Learn How to Save Recruitment Dollars by Improving Retention Strategies, will take place Tuesday, April 9 from 4:00 to 5:00 pm.