You have just hired your next superstar – congratulations! The first challenge is over. Now comes the big one – Retention!
In his book “Topgrading”, Dr. Brad Smart presents research which shows that the cost of employee turnover has a negative ROI of almost 500%. Clearly, hiring the right person and retaining them is critical to the long term success of your business. Much has been researched and written on the subject of Retention. A lot of the focus has been on the differences in career aspirations and employment expectations between the various demographics (Boomers, Gen X’ers, Gen Y, etc.). However, at the end of the day, the individuals you really want to keep for the long term are your loyal contributors and growing leaders, and each of them (regardless of their demographic) are probably most concerned about the following 5 factors:
Employees want to be well led. They want to be able to look up to and respect their leader for integrity, vision, fairness and magnanimity. It has been said that employees don’t leave companies, they leave people – and that is usually their boss. It is incumbent on you to provide that kind of leadership.
In the Harvard Business Review classic “One More Time: How do you Motivate Employees?” Frederick Herzberg states “People are most satisfied with their jobs when those jobs give them the opportunity to experience achievement”. While we all can’t work on a cure for cancer or land a man on the moon, the jobs we do can become more meaningful and stimulating when we can see the direct connection between what we do and the goals of the company which we believe in.
Fair Reward System
The Dual Factor Theory posits that compensation in itself is not a motivator, but (in Frederick Herzberg’s terms) a “Hygiene factor”. However, the absence of a (perceived) fair compensation system is a dissatisfier to employees. Employees want a compensation system that is fair externally (i.e. in the marketplace), equitable internally, and rewards individuals for work that contributes to the goals of the organization.
Employees want to be acknowledged for both their achievements and their efforts. While public and tangible recognition for achievements (like plaques, bonuses, etc.) are great, they generally are too infrequent (e.g. quarterly or annually) to have a sustainable impact on employee engagement. A combination of personal and/or public “attaboys” on a regular basis recognizing on-going effort goes a long way to engaging and retaining your staff.
Employees want to work in environments that engage them mentally, emotionally, and socially. And yet, a 2012 Deloitte survey found that about 80% of US employees are not really engaged in their work, costing the economy about $300 million a year. It’s our job as leaders to foster this kind of workplace.
Employee retention doesn’t have to be complicated. Regardless of cultural and demographic differences, employees generally want to be well led, do jobs they enjoy which contribute to the success of their company in environments which fully engage them, and get fairly paid and regularly recognized for their efforts. Providing this kind of framework will go a long way to reducing costly turnover, and raising the engagement and productivity of your team.
Fulcrum Search Science Inc. has been helping clients Build High Performance Teams since 1971. We bring professional search and assessment rigour to the critical $100-250K compensation band.