Are Your Best Employees Holding You Hostage?

Make your employees happy and they’ll stay. Seems an obvious mantra, doesn’t it? Yet a recent annual survey from Salary.com shows it isn’t true. This article by Jessica Stillman in Inc. magazine breaks down the research rather neatly, but the key statistics are:

• 83% of employees said they’re looking for a new job this year, up 6% from last year
• Only 46% said they’re discontented at work, down from 69% last year
• 28% of job hunters said they’re content in their positions

So why are people leaving (or trying to)? The top three reasons from the survey were:

1. Low pay: 16%
2. No possibility of advancement: 15%
3. Underappreciated: 13%

Should we pay people more, then? Will that make them happier and convince them to stay? Not necessarily, according to Stillman. She makes the point:

“One, the number who are after higher pay actually decreased 8 percent from last year, and only 29 percent said a raise would lead them to stick around. Half of those job hunting even received a pay bump in the previous year. But there’s also a second reason to think twice before blaming employees’ excessive interest in pay. Bosses often have an unhealthy attitude toward raises themselves. Felix Salmon, writing for Vox about the issues surrounding pay swirling around the ousting of New York Times editor Jill Abramson, makes a more general point about the trouble with how many companies handle compensation.

“‘We’ve all worked in companies, I’m sure, where the only way to get a substantial raise is to confront management with a job offer from somewhere else. That’s clearly a dreadful way to run a company, since it gives all employees a huge incentive to spend a lot of time looking for work elsewhere, even if they’re very happy where they are,’ he writes. If you’re one of those managers, and you’re looking for someone to blame, you need to look in the mirror.”

That’s the crux of the discussion good managers and compensation professionals need to be examining:

1. Are people paid appropriately for the work they do (especially if they have long tenure and their salary isn’t keeping pace with newer hires in similar roles)?
2. What’s the cost of productivity lost to good but disengaged employees who are looking for a new job (or daydreaming about one) while on the clock? Can those figures be used to justify needed raises?
3. What else can be done more effectively (and cost effectively) to fulfill employee needs for validation in their work?

Let’s focus on that last point for a moment. Social recognition is one of the most powerful tools in the manager’s toolkit to both help employees feel more appreciated for the work they do and to assess employee job fit, contribution and potential areas for advancement. When the entire work community is involved in noticing and appreciating the good work of others, leaders gain much more information on where team members excel and contribute best. This information, when gathered in a strong system of record, can now be used for more effective talent management and advancement of careers.

As a side note, “hate boss” was fifth in the list of reasons to leave with only 5% of those surveyed citing it. It’s true people leave bosses, not companies, and this stat can be deceptive. Looking at the list of why people want to leave, career advancement and appreciation are areas in which the boss has direct control or influence.

Think about the people who have left your organization in recent months. Why did they leave? What could have induced them to stay? Why do you stay?

As Globoforce’s Head of Strategic Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. His articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin, Montreal and Boston. Follow Derek on Twitter at @DerekIrvine.

Comments

[Jacque Vilet]

Employees give "pay" as an issue sometimes because that's the easiest thing to point to. It's the reason given when people leave the company as well.

[John A Bushfield]

Derek - Whenever I see a statistic like "83% . . are looking for a new job this year" I'm immediately suspicious. Taken literally, that means that out of every 10 employees in any given company, almost 9 are actively seeking to leave! If true (and I doubt it's veracity), I don't think pay has anything to do with it. Pay has been the whipping boy for all things deemed unsatisfactory since surveying employees began. Remember the old Employee Satisfaction Surveys that were all the rage in the '80's and '90's? I administered 1000's of them, and regardless of the overall sat results Pay was always an issue. You can never slay that dragon; whatever your comp practices, it's never gonna be enough for some percentage of folks.

No, the high percentage of employees looking elsewhere has to do with the job insecurity created by the ease with which they are discarded by their employers. Like it or not, the sad fact of the matter is that employee loyalty is a thing of the past. We've been sending messages out for decades that the real employer is You, Inc. Every time the economy hits a speed bump (read Stock Market decline) the first reaction is to cut employees, and hundreds of thousands of workers get the axe. RIF's are a financial tool and a management tool: don't like an employee but can't find a performance issue to fire 'em? Reorganize!

There's no question that some companies engage in draconian pay practices and who are willing to tolerate extremely high turnover. But in this age of talent shortage organizations are becoming more sensitive to competitive pay practices. Regardless, until employees begin to feel safe again, the devil we don't know is going to be better than the devil we know.

[Derek Irvine]

John and Jacque, great points. You're right -- "more money" is the easy, safe answer, not necessarily the true one.

You inspired me to write in more detail on this on my Recognize This! blog - please check it out. http://www.recognizethisblog.com/index.php/2014/05/retain-employees-will/