Companies operating in the United States face a tight labor market. Having strategies in place to retain employees is vital. If you believe you can provide a counter offer to an employee on the day she or he presents you with a resignation letter, that is a big mistake. It is already too late!
Research shows (and I know this from years of experience) that employees who decide to move on made the decision to look for something better months before, and it’s usually because of some action taken by management or their immediate supervisor that they believed was not fair.[i] It can also be simply a loss of trust in top management, the company’s business strategies, or its capability to implement those strategies.
By the time resigning employees present their resignations, they have often been looking for weeks for something better. Even if you offer to top the competitor’s pay and promotion package, you probably can’t bridge their loss of trust.
Don’t make the same mistake above, or the following mistakes. Instead, take these proactive steps to retain your talented workforce:
- Not telling your top employees that you value them, and they have an important future role in the company. Many companies take their best people for granted. While their immediate leaders have probably “shared the love,” top management also needs to meet with your best employees to acknowledge their important contributions, ask them what roles they want in the future, and tell them of the company’s plans for their careers.
- Not paying competitive rates to everyone, as well as premium rates to your best people. Employees expect to be paid competitive rates. In a tight labor market, employees will leave companies for employers that pay them more, often easily getting a premium package of 15% or higher.[ii] If you haven’t benchmarked your pay structure against a large compensation database that matches your company’s jobs, this is a good time to start. In addition, you should pay your best workers a premium, at least 10% above the market, for their superior contributions. If you don’t, someone else will.
- Not having a well communicated higher purpose, company vision, and business strategies. When employees are connected to the company’s purpose and vision and feel they can personally contribute, it builds a strong bond. They may not want to leave.
- Not understanding the importance of having a collaborative and dynamic company culture. Collaborative, dynamic cultures are faster at making improvements, are more innovative, and enjoy better financial performance.[iii] In addition, employees, particularly millennials, prefer these cultures.
- Not having agile leaders. I define leadership agility with the acronym A2C2E2. Agile leaders are able to relate to workers who have a different background from their own and can align their teams to the company’s purpose, mission and strategies. Agile leaders are constantly communicating and clarifying changing business realities, goals and operating norms. Finally, agile leaders are empathic, build relationships and empower their employees to perform at their best. They do this with ongoing performance and development feedback and coaching that empowers employees to overcome obstacles and attain high performance.
- Not changing your performance management system from demanding compliance to promoting collaboration, teamwork and achievement. Companies cannot have dynamic collaborative and innovative cultures without having performance management systems that promote and reinforce such cultures. If you haven’t changed your 1990s based performance management process, it is time to step into the 21st century.
They are no silver bullets for retention. It takes a comprehensive talent management strategy.
What are you doing to improve retention? Join the discussion.
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and is a Managing Partner of InnovationOne. He consults on innovation, talent management, developing agile leaders and teams, and other strategic initiatives. Questions? Please e-mail Victor at email@example.com or visit www.victorhrconsultant.com. For innovation visit www.InnovationOne.US.
[i] Leigh Branham (2005) The 7 Hidden Reasons Employees Leave: How to Recognize the Subtle Signs and Act Before It’s Too Late, AMACOM, American Management Association.
[ii] “Escape to Comptopia: 2016 Compensation Best Practices Report,” Payscale Research Report. February, 2016. Found at https://hub.payscale.com/i/645228-payscales-2016-compensation-best-practices-report?utm_source=Marketo&utm_medium=Newsletter&utm_campaign=Mar2&utm_content=cbpr-flipbook&mkt_tok=3RkMMJWWfF9wsRonuavPeu%2FhmjTEU5z17%2B4oWqGwgp141El3fuXBP2XqjvpVQctqPL7YDBceEJhqyQJxPr3BLdcN1Nl2R
[iii] Dr. C. Brooke Dobni, (2011), “The relationship between innovation orientation and organisational performance,” The International Journal of Innovation and Learning, Vol 10, No.3 Pages, 226-240. Other references include the Booz and Company Global Innovation Study, 2010, and Arthur D. Little Innovation Survey, 2005.