Will They Stay? Or, Will They Stray?:
What Matters Most to Employees
It's not uncommon for employees today to "shop" for the best offer when looking for a new job. Given the low unemployment rate, a robust economy, and stiff competition for technically talented workers, the applicant today has a lot of bargaining power. For example, a human resources manager recently shared with us that in order to hire the preferred candidate, the company had to offer a signing bonus. That in itself is not unusual, but this candidate was interviewing for an administrative assistant position! (Signing bonuses have been typically limited to top management and specialized technical positions.)
Keeping good employees has never been tougher. When a disgruntled employee says today, "Hey, I can get a job across the street tomorrow. They'll pay me more, too!," they are most likely right. Wise leaders know that it is no easy task to attract and then retain great employees. They also know that making a concerted effort to keep talented employees is not an option today, but a required critical aspect of leadership.
We are fond of saying, "Unless you've got followers, you're probably not a leader." Given the challenges of hiring talented employees in today's highly competitive labor market, keeping your "followers" becomes essential to your success.
Most human resources professionals estimate that it costs between 70 to 200 percent of an employee's annual salary to replace lost talent. Factored into the equation are recruiting costs, training, and loss of productivity until the new employee is a full contributor. So from a bottom-line perspective, once hired, keeping good employees is definitely a dollars issue.
Beyond bottom-line concerns, though, retaining your talent makes good sense from a teamwork perspective. Unhappy employees who leave, or threaten to leave, have a negative impact on morale and motivation. The only thing worse than one unhappy employee is a whole team of depressed employees who do not like their jobs!
Our experience shows that leaders look at retention challenges from two different perspectives. Reactive leaders throw up their hands and say, "Hey, I can't pay them more. If they're going to jump ship for more money, I can't stop them. There's nothing I can do!" But proactive leaders know that employees do not make the decision to leave based on money alone.
In 1999 the Hay Group surveyed more than 500,000 employees in 300 companies. Asking participants to prioritize retention factors, pay ranked among the least important. Our findings, based on conducting over 100 employee opinion surveys during the past nine years, also parallel the Hay Group study. We find that when a company is paying a fair market wage, salary ranks towards the bottom of the list of what's most valued by employees in their relationship with their employer.
So, if pay is one of the least important retention factors, what does matter to today's employees? What can individual leaders do to keep employee enthusiasm and commitment levels high?
Employees tell us what matters most is the ability to:
1. Learn and grow in their jobs
2. Do work that is challenging and meaningful
3. Work with good people
4. Feel like they are a valued team member
5. Work with good bosses
6. Be recognized for their contributions
7. Be autonomous and feel in control of the work
8. Have flexibility in their hours and dress
Consistently coming in towards the bottom of employee-ranked lists is "fair pay and benefits." What's exciting about this list is that while we may have little control over their pay, we have a high degree of control over what employees say really matters and will keep them on the job.
These tips will help you become a retention expert with a loyal "following."
1. Make Retention an Organizational Commitment
Employee retention is critical to your organization's success. Know your employees and their values. Don't assume you know. Ask and listen carefully to the responses. If you're not sure, conduct a survey. Once you've identified important retention factors, take actions as a management team that support your employees, both professionally and personally.
2. Create an Exciting Environment
Focus on keeping the tempo up. Get to know what work excites them. Give more opportunities to do challenging work. Delegate something meaningful. Provide training. Get people involved in determining the team's vision and setting goals. Be both the coach and cheerleader!
3. Remember, People Come First
Today's workforce values a balance between work and life. Acknowledge people as unique contributors and value their time away from work. Entertain flex schedules and allow for telecommuting. When possible, provide comp time after an extensive project. Try to promote a happy, productive, stress-free environment that acknowledges people have a life beyond work.
4. Spend More Time Leading and Less Time Managing
Demonstrate your trust by giving employees more opportunities to direct their own time and work. Be open to creative approaches for accomplishing work. Listen to your team and use their input. Serve as a mentor. Model what you want to see. Praise and recognize work and behavior that you want.
Most leaders know what to do, but often become too busy to focus on what employees say matters. But...if you are too busy now to focus on creating an environment that keeps employees, how will you find the time to replace people when they leave?
© Peter Barron Stark & Associates
