Here’s the scenario that I see emerging in multiple companies: One valuable and respected employee is frustrated by the way she’s been treated by her employer over the last few years – reduced hours, lost pay, no advancement, and some personal conflicts with her boss. She finally works up the courage to look outside for other jobs.
Because she has valuable skills, she manages to get a great job with the competitor across town. This sends shock waves through her previous co-workers, because they now realize that it’s quite possible, and beneficial, to start looking for jobs elsewhere.
Those who get jobs first, of course, are the employees who are the most valuable. They have the best skills, experience and soft skills. The holes that open up are significant, and the company will pursue one of three avenues for recovering.
First, these may become opportunities for promotion. That may be quite attractive for some who want to advance, depending on how the process is handled.
Second, the company could take this opportunity to continue to eliminate jobs and save money. The remaining employees will interpret this as a strong signal that advancement is only an illusion, and the company is falling behind the competition.
Third, the company might replace key positions by hiring from the competition. This will encourage circles of job-hoppers in the industry, encouraging employees to look for external opportunities rather than staying with their current employers.
As the boss, why should you care? After all, a certain amount of turnover is good: It helps to bring in new ideas and approaches, and gives opportunities to restructure the workforce with new skills.
Imagine, though, that you end up losing 80 percent of your capability (remember, your strongest employees will leave first) in a short time. What happens to your key processes? Do you still have your base of knowledge? What happens to your customer relationships?
Even if you hire high-quality replacements away from your competition, each departure will cause significant damage.
So what can you do to encourage your employees to stay? Multiple studies have shown, surprisingly, that money is not the top of the list. Employees need to make enough income to survive, of course, but beyond that, other factors start to take over.
Why we work
- Liking the work. This tops the list, but it is a complex mix of several factors: having a supportive and constructive relationship with your direct manager; seeing value and meaning in the work you do; being recognized and encouraged for your accomplishments; and liking the other people you work with. It’s important to note that recognition doesn’t necessarily involve money. Often, timely kind words will go much further than a fleeting bonus or even a thank-you gift card. This is because money can be given out without regard to you as a unique individual, whereas meaningful conversations often acknowledge the deeper value of your contribution.
- Opportunity to improve. Few people want to be doing the same exact work that they’re doing now in 10 years. Most desire some kind of change, development, or advancement. Realize that the recent business environment has shown many people that moving into management is not an attractive option. Instead, many employees now seek increased influence, more significant contribution, skill development and ability to innovate.
- Belief in the organization. Many find this surprising, because of the perception that workers mostly just focus on doing their assigned jobs. But we all strive for deeper meaning in our lives, and that includes the time people spend at work. We are fortunate to have a number of notable examples here in Northern Colorado. I’ve run across a significant number of small companies that build employee motivation on a compelling, powerful mission.
- Job conditions. This encompasses many things such as work hours, location, work environment and flexibility. Some of these are very personal, but others, as the employer, you’ll have great influence over. That includes a number of things that don’t cost much money at all, and you can immediately reap the rewards of greater productivity. Being flexible around each worker’s individual needs will create a basis for long-term loyalty.
- Financial considerations. While this comes in near the bottom of the list, it would be dangerous to assume that pay is unimportant. But once you’ve reached a level appropriate to the lifestyle of the individual employee, and they perceive that it’s fair, then other factors become much more important. This is especially true now that most employees understand that pay raises are uncommon in a tough economy.
What are you doing in your company to:
- help people like their work and the people they spend the most time with?
- have opportunities to improve, grow, and advance?
- believe in the mission of your organization?
- love the conditions around the work they do?
- provide employees with fair and reliable pay?
These are the reasons why your employees will stay with you as their opportunities increase to move to your competition.
Carl Dierschow is a Small Fish Business Coach based in Fort Collins. His website is www.smallfish.us.