Retention? Easy: Ask Stars What They Want
In tough times, motivating people may fall way down the list of priorities; survival comes first, as the risk of defection is much lower in a recession. Most people are simply relieved not to be part of downsizing, and while top performers have greater flexibility to move, they don’t want to sell their skills into a down market.
As the Great Recession wanes, keeping the best players and inspiring the rest is moving up on a leader’s priority list. Money isn’t the answer: money is only one driver in terms of retention when companies pay below-average market rates. Employee engagement is multi-dimensional, and companies need to weigh compensation, worklife balance, professional-development programs, and other factors that contribute to job satisfaction.
Granted, there is no one-size-fits-all solution to keeping people happy and engaged. But you can do these three things:
1. Identify people you can’t afford to lose
To do this well, you have to know your strategy. Many leaders fail to rethink strategic assumptions often enough. Review your strategy at least every other year. Revisit your strategic plan. Align people decisions with strategic outlook. For example, if you see most growth coming from abroad, focus on retaining and recruiting executives with global experience and mindsets. If you have an acquisition-based strategy, boost M&A and integration competencies.
The executive who did a good job cutting costs might not be equally effective when you are accelerating into growth. The key is to make sure you are investing in the right people—those who are capable of executing the company’s long-term strategy.
2. Differentiate between the great and the good
You need a combination of all-stars and solid performers. To retain the best from both groups, you need to meet their distinctive needs. High potentials are primarily driven by challenges that foster their career ambitions. They see themselves as some day running the division, or the company. Wired differently from solid performers, high potentials find average tasks boring; they want stretch goals and the chance to take charge. Throwing money at them won’t make them stay; if they foresee reaching their goals faster in Company A, they’ll go there.
The correct incentives for them are interesting and challenging positions and a clear shot at advancement. Flexibility in terms of work hours and arrangements—such as ability to take nonpaid leaves, do job-sharing, or work remotely—count heavily, too. Most of your employee population are solid performers who may never make it to the C suite but who keep the trains running on time. This group is motivated primarily by security, loyalty, and a healthy culture that matches their values. They are more apt to seek benefits and incentives related to stability, such as broad, subsidized health coverage and a sponsored education program. For the solid performers, the right kind of incentive is one that demonstrates trust and loyalty—for example, long-term incentive plans.
3. Know your Gen Xs, Ys, and Nets
Gen Xers are born from 1964 to 1972; Gen Y goes from 1972-82. People born after 82 are Net-geners. Incentives like job-sharing, flexible work hours, and a sense of challenge are powerful lures for the younger generations; job security, high base salary, and robust health-care benefits are more critical for Gen X. The trick is to appeal to the newbies without giving the impression to their older colleagues that the company is bending over backward for the younger generation.
By offering each group what it values, you keep more of the people you want. You need to know who your people are and what matters most to them. Why provide company cars when your young just want an overseas assignment and your older strong performers prefer a better health plan. The tough things that leaders did to keep going—pay and promotion freezes, pension changes, mandatory furloughs, cuts in recruitment and training budgets—eroded bonds. Economic recovery offers a chance to restore them and renew a sense of pride and purpose. This isn’t a matter of making it up to employees; it’s the ultimate competitive advantage.
First Published in Leadership Excellence www.leaderexcel.com 9/2010