The Talent War is heating up.
Boomers are retiring. At last, they can afford to.
GenX has business experience, but is not nearly big enough to replace the Boomers person-for-person.
Millennials, despite what some of the more, ahem, confident of them think, are generally not ready to step in at the executive level. They are also in the period of life where many leave after a short time.
What’s a CEO, business owner or HR professional to do? How do you keep the good employees, and attract the new ones you need?
Turns out Maslow was onto something with his Hierarchy of Needs:
And others have helped expand his concepts.
Studying past employees that were the most engaged (and disengaged!) the mash-up that makes the most sense to me:
These are needs. Not wants or desires or values. These are the needs of all human beings. Everywhere. Even when they are at work.
You attract and keep talent by meeting their needs. As individuals.
When individuals meet their most important needs at a high level, you get all kinds of wonderful things happening at work. On a macro level.
Engagement. Passion. Which breed Culture and Innovation.
Which helps attract more talent.
The winners of the Talent War will not ask workers to check their humanness at the door. Instead employees will bring their full humanity with them. And organizations will build their culture up from the bottom up, one human connection at a time. Not artificially down from the top.
An employee decides to stay or leave based on whether or not his or her most important needs, both professional and personal, are being consistently met at high level.
Common wisdom about what drives employee retention is wrong.
This well-meaning common wisdom advises:
These flaws cause this well-meaning advice to lead to wasted investment, with missed opportunities for improved employee retention.
There are four components that an employee considers, often times unconsciously, when deciding to stay or leave their job.
Employee Retention Equation: ©
Equitable and Adequate Compensation
+ Needs-based Engagement
It’s critical to understand each of these components and how they work together in order to retain your most valuable employees.
The good news is that this each component is based on common sense and most people can readily test this equation against their own experiences and decisions that they have made throughout their careers.
The ideas are simple, but powerful, when it comes to employee retention.
Equitable and Adequate Compensation
Most people these days understand that retention is not all about money. And it’s true. But money and compensation do play a factor.
Dan Pink puts it well in Drive:
“People have to earn a living. Salary, contract payments, some benefits, a few perks are what I call baseline rewards. If someone’s baseline is not adequate or equitable, her focus will be on the unfairness of her situation and the anxiety of her circumstance…”
As Northern Nevada adds 50,000 or more new jobs in the next few years, there will be a shortage of workers. This will cause the competition for talent to be fierce. A natural result will be wage and salary inflation, as competitors will use increased compensation as a way to lure employees away. Historically, Reno businesses have enjoyed a discount for labor compared to comparable talent in other regions of the country. This fact is not lost on the workers.
Compensation must be equitable both within the industry and within the company itself. If an employee feels that he’s vastly underpaid compared to similarly skilled workers at other companies, or compared to fellow employees, then they will focus on the unfairness of the situation.
Employees at the lower end of the payscale can, by definition, assume to be living in economic anxiety. That’s why it’s not uncommon to hear stories of distribution center workers moving down the street for $.25 more an hour. When someone is living with that type of pressure, engagement and culture mean little to them.
Contact Workforce Retention Solutions to learn more about the other components of employee retention.