The Wall Street Journal recently reported that employees are voluntarily quitting their jobs at the highest rate since the internet boom in 2001, and most of them are getting bigger paychecks – roughly 30% increases according to the Federal Reserve Bank of Atlanta. The trend is across all industries and is due to the strong economy and very low unemployment.
Nearly all of my clients have reported losses of good people, mostly to competitor companies and for significantly higher pay, and many clients have been struggling to find good, reliable people to hire for some time now.
Here’s what you should be doing now:
1. Focus on Your Best People.
You cannot effectively address this concern by looking at your entire workforce. Instead, create a list of the 10-15% of employees who are high performers and/or the ones you cannot afford to lose because of their expertise and the critical nature of their jobs to your operations and your customers.
Go through the list person-by-person and determine the following:
- Are they being paid what they are worth?
- Are they being managed by an effective manager who is good at engaging and communicating with his/her people? Does the manager know of any frustrations or problems the employee is experiencing?
- Are they challenged, stimulated, and feeling accomplishment?
- Have they been told recently how much they are valued?
- Is there a development plan in place specifically for each person to provide more opportunities to get involved in the business? For ideas, look at the article I co-wrote for Forbes: http://bit.ly/2KWb4P5
Make changes to fix any of the problems identified. If you need to make exceptions to pay policies or other practices, do it. These are your best/most valuable people. Losing any one of them will cost you 1.5-2 times their annual pay in lost productivity, position vacancy, costs to cover their absence, replacement and training costs associated with a new hire, etc.
These changes need to be proactive. Waiting until someone receives an offer from another company, then making a counter offer seldom works to retain the person, and even if you do manage to keep them, it causes ongoing resentment.
If you are concerned about losing the best of the best, then you might want to take even stronger measures, such as a long-term retention incentive. It accrues value for key people and if they leave the company, they’ll also forfeit the accrued value.
2. Strengthen Your Company’s Capability to Attract, Select, and Retain Good People
The ability to retain high performers is the result of doing many things well – not just one thing – and it begins with recruiting and selecting the right people in the first place. Of course, this is very challenging in a business environment like today’s, and that’s why it’s so important to do it well.
- Create A Compelling Value Proposition. Answer this question: Why would a really good performer want to come to work at your company? (The answer is more than pay and benefits.)
- Develop Specific Profiles. Ideally, you have very clear profiles of the kinds of people who fit your culture and who will perform well. These are not canned profiles from personality questionnaires, but rather the result of thinking-through the skills, perspectives, learning style and attitudes you want.
- Strengthen Your Recruiting and Selection Process: You’ll also have an ongoing recruiting process – not just when there are openings, but all the time and with people who are already screened and qualified, ready for an offer. This needs to be treated as the important process it is, and continually improved. Both quality AND speed are imperative in filling positions.
You can make a positive difference in retaining your most valued people, but like any other key challenge, it needs serious attention.
Copyright 2018 Bob Legge
I am a trusted advisor to leaders of Fortune 500 companies, mid-size companies, nonprofits, education, and government. My work helps leaders drive strategy, lead successful change, develop high performance cultures, improve individual and organizational performance, and produce faster, sustainable growth and value.
If you want to seize new opportunities, dramatically improve your leadership effectiveness, and free-up more time for yourself and your family, give me a call.
My website is www.boblegge.com
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