Stay or Leave: What Companies Can Do To Retain Employees in 2024
How Companies Can Retain Their Top Employees This Year
On Thursday Jan 18th 2024,
and I are hosting a workshop on defining your career values. If that’s your jam, you should join us (Sign Up Here)Employee Retention: What Do Workers Want out of Their Jobs and Careers?
Last year at the beginning of the year, I wrote about this idea of “The Cost of Work,” and how employees were re-evaluating the costs and benefits of their job, and having second thoughts on whether or not the costs were worth it
While this may cause some people to leave, or look for new jobs, others were finding ways to mitigate the costs inside or outside of work, (side hustle, work-life balance) or asking their employers to start taking on some of these costs (increased mental health benefits, child care) to make sure that employees could do their jobs effectively.
A year later, we’re still in challenging economic times, an election year, and while executive sentiment about growth is cautiously optimistic, while many companies are not hiring aggressively, most companies are worried about retention.
Losing productive talent is never good, but more so in an environment where hiring is flat, and low unemployment, not to mention, all of the downstream business impact of losing talent on morale, productivity and engagement on the rest of your employees.
So the question becomes, how do we retain great talent?
When was the last time you left a job? Why did you leave your job? What were the factors that led you to leave? Better pay, better opportunities, a bad boss, work-life balance?
According to a BCG survey of 11,000 employees, all of those.
Led by Managing Director Debbie Lovich, Debbie and her team set out to better understand what really matters to employees, especially those who are raising their hand suggesting that they might leave or jump ship.
Here are some of the key findings:
1)People overwhelmingly leave for functional benefits
When asked why you would leave a job, most people selected what Debbie and her team are calling functional benefits. Namely, compensation, benefits and wages. This isn’t really a surprise, and goes to highlight that all else equal, paying people competitive wages and offering relevant benefits still matters.
This mirrors other data out there such as what Workhuman found in their Human Workplace Index survey of workers. When asked why employees chose to stay with companies, employees responded with “I had good benefits” and the #3 reason was “I was compensated fairly.”
2)But emotional benefits matter too
When it comes to looking for a new role, while pay matters, so too do what BCG calls emotional benefits. BCG designed their survey instrument to ask some questions very similar to making a purchasing decision, namely in making people select a “forced choice” about different elements of work, “emotional benefits,” such as, being fairly treated, feeling like I have job security, and doing work I enjoy all bubbled to the top.
Again, drawing on the Workhuman Human Workplace Index, the number 2 reason why employees said they stayed was because of “liking my co-workers.”
3)Non-Pay & Emotional Benefits matter for predicting attrition
In the survey, the team asked a simple question of “I see myself working at my company in one year” and then correlated how they valued the different attributes of the job with the “yes/no” responses. Turns out, for employees most of the functional benefits mattered much less than the emotional ones, with the most important factors being job security, being treated fairly and respected, enjoyable work, and feeling valued and appreciated.
4) Managers are the Lynchpin of Employee Retention
If you’re reading this newsletter, you know I’ve beaten the drum on the role of the manager for a while, and it’s data like BCG’s which makes me feel so strongly about this. In their research, they found that managers are associated with a 72% reduction in attrition when comparing employees who are very satisfied with their managers with those who are very unsatisfied. This was also the lever with the strongest influence on attrition risk across all surveyed countries. On the flipside, strong dissatisfaction doubles attrition risk
Moreover, they also found that outside of retention, great managers were associated with a 3.2x increase in employee motivation and a 13.9x increase in job satisfaction.
In some respects, the data and findings are straightforward - At the base layer, most employees want basic and fundamental things. Fair pay and benefits, polite and respectful colleagues, doing work that contributes to something, and being acknowledged and recognized for their work.
What Companies Should Do To Retain Their Employees
So what do we do with this information? How can companies proactively identify ways to retain their employees? Here are a few suggestions:
Evaluate The Costs & Benefits of Work - It’s clear that paying people fair wages and providing them reasonable benefits matters to retention and attrition. Over the years, we’ve often equated benefits and pay with more perks and programs. And to a certain degree, I think that matters.
But one area worth exploring is “addition by subtraction.” If you think about the “costs” associated with work, how can you either remove them, defray them, or even cover them? When I think about the cost of work, I think about visible things like child care, commuting, working hours, but then also, perhaps so harder to see but valuable things like communication and collaboration, norms for meetings, time for “deep work,” etc.
Nobody goes to work to do a bad job, but there are many “costs” that get in the way of them being able to do a good one. Evaluating and identifying the costs you can remove, defray, or reduce can be a great way to boost retention.
Understand Why Your Employees Hire You - When an employee prepares for a job interview, they regularly are trying to make the case for why an employer should hire them. It’s time that companies start asking the same question back to their employees.
The changing nature of the employer-employee contract and a tight labor market means that if you want to retain employees, it makes sense to understand why they hire you, and their job. What do they get or want out of working for you? Why do they show up to work each day? Being able to listen, and understand these core motivations, can help managers and leaders better tailor the work and job to each employee, but it starts with asking the question.
Focus on the Role of the Manager - There is so much opportunity to both reimagine the role of the people manager, and equip them with the tools they need to manage effectively. Part of this responsibility is on the manager carrying these activities out on a regular basis, but that all starts with companies making manager effectiveness a focus and priority. “
The manager is the lynchpin of the personalized employee experience” Tom Libretto, President at Workhuman said to me in a recent conversation. “Creating an organization that both values and rewards managers who recognize and value their employees matters,” Libretto went on to add.
Understand how individual employees want to connect & communicate with others - What’s striking in the research from BCG and Workhuman is that how much moments and interactions each day can positively or negatively impact the overall experience of an employee, so much so that it makes them want to stay, or leave.
Recognizing, acknowledging and rewarding employees are not big monolithic programs, they are individual actions employees and leaders can take everyday that can make a big difference in whether an employee wants to stay or leave. “Appreciation and recognition of behaviors from your peers and colleagues drives everything, including how we engage and show up at work,” Libretto said.
Taking the time to understand from employees how they want to communicate, how they liked to be recognized, or what kinds of ways they feel they want to be connected to the organization and other employees and then trying to deliver on them can have a real impact on morale, satisfaction, and productivity.
That’s all I got. Have a great week!
Al