Employee Retention 2.0: Getting Good People to Stay

To promote cooperation and teamwork, remember, people tend to resist that which is forced upon them.  People tend to support that which they helped create.

Vince Pfaff

Employee turnover has a huge impact on an organization.  Financially – where the “replacement costs” of an employee can be up to four times her salary.  Motivationally – where other team members may question their own job satisfaction and disengage.  According to a recent survey of 1,000 Americans by career expert, Michelle McQuaid, two-thirds of American employees are unhappy with their jobs.  What’s the main reason?  They’re unhappy with their bosses.  As a result, this is costing companies $360 billion annually in lost productivity.  The interesting fact is that 65% of those surveyed indicated that a better boss would make them happier in their current jobs, and only 35% indicated that a pay raise would offer them the same happiness.  Here are some additional statistics from Ms. McQuaid’s survey that are important to leaders:

• 31% of those surveyed feel uninspired and unappreciated by their boss.  Close to 15% feel downright miserable, bored and lonely.
• 38% described their boss as great; 42% say their bosses don’t work very hard and close to 20% say their boss has little or no integrity.
• 60% say they would do a better job if they got along better with their boss.
• 70% say they would be happier if they got along with their boss.

So, if the old retention philosophy of offering a pay increase or a promotion isn’t what’s working for today’s workforce, what can a manager do to get good people to stay?

1. Realize carrots and sticks don’t even work for mules.  Your managerial approach and human interaction is what will drive employee satisfaction and performance.  Today’s employees don’t thrive in a dictatorial reporting structure.  Appreciation, enrollment and recognition need to become a leader’s go-to tools for motivating and incenting his team.
2. Take a keen interest in what your employees’ needs are.  Leaders are normally excellent at assessing the external customer’s needs and delivering a product or service to meet those.  However, as the saying goes, happy employees = happy customers.  Find out what your employee needs from you and see how you can meet them.  (Hint: mentoring is part of what makes a great leader.)
3. Interact with your staff proactively and often.  My personal opinion is that if employees say that their bosses don’t work very hard, it relates often to the fact that bosses stay stuck in their offices or conference rooms.  Therefore, they assume that the boss “isn’t really working”.  Get out and about to talk to your team.  Find out what they’re working on and share some of what’s going on in your world.
4. Ask for feedback other than just a 360 assessment.  As a manager, do you ever seek feedback from your direct reports on how you’re doing other than when the company “makes you go through a 360 assessment”?  Plan to meet 1-on-1 with your directs quarterly.  Ascertain how satisfied they are in their positions and find out if there is anything you can improve upon as well.
5. Take time to have some fun together.  A Littleton, Colorado-based energy company found that its unwanted turnover decreased from 25 to 5 percent within a year after it instituted a “play policy”.  This will help you get along better with your employees and address the boredom and lack of inspiration that creeps in by employees who are on the verge of disengaging.

Your goal as a leader should be to foster the potential in your high performers and get those good people to stay.  As you can see from the survey results, employee retention 1.0, i.e. focused on financial rewards and incentives, are becoming the approach of the past.  It’s time to implement employee retention 2.0.

I would love to hear what programs, other than financial rewards, you have put in place to retain employees.  What benefits have you seen from these initiatives?  Just join in on the conversation below.