Retaining Employees in a Competitive Job Market
The ideas of work and compensation have changed dramatically over the generations. Post-World War II, the “pension and a gold watch” were the mainstay of working a corporate job. Families could live comfortably on one income, and workers generally stayed at one job during their careers or perhaps made a few switches within the same industry.
Work/life balance, employer/employee trust, and job satisfaction were all signs of a healthy job market and good balance of power in which growing industries needed workers, and workers took pride in their positions. Much has changed, however.
The average worker now changes jobs 5 to 7 times during their career, with approximately 30% of the workforce changing jobs every year. Some have skills that are in high demand which allow them to constantly move in search of better compensation, while others can’t find a work environment in which they feel comfortable.
Many of today’s workers were alive during the 2008-09 Great Financial Crisis (GFC). Whether true or not, they often feel that companies abandoned their loyalty to workers to save their own balance sheets or executive compensation. The market crash destroyed many 401(k)s and IRAs, and the experience led to the private sector pension being a thing of the past.
With supply chains, finance, and labor going global, the pride and loyalty felt when working for a domestic manufacturer or company has become a thing of the past. When the GFC made workers feel as if they were seen as easily replaceable and not worth a pension, job and industry hopping became a regular occurrence.
If you are an employer who would like to understand how to better retain your employees within this new employment paradigm, keep reading. We will cover what it means to be competitive for attracting and retaining top talent today by keeping up with what the job market wants. Most notably, how pay rates and direct financial compensation are not always the key determining factor for retaining employees in a competitive job market anymore.
Understanding Employee Motivation
Many employers believe that pay rates are the primary motivation for employees, so that is where they put all of their focus for hiring initiatives. More are starting to discover that job seekers may have a desired salary range, but place other attributes like job security, work/life balance, child care at or near the office, or other factors at the top of their list.
It has never been easier to survey sentiment across a group than it is now thanks to technology, much of which can be leveraged cheaply or often for free. Whether you use your current employees or job applicants as your focus group, take the time to learn what motivates the people who work at and apply to your firm.
You may be surprised at what you discover.
Offering Competitive Compensation and Benefits
Understanding what constitutes a competitive compensation and benefits package today is quite different than it was a decade or two ago. While platforms like GlassDoor can be used to find salary ranges for different positions, the perks and benefits that are offered within industries can vary widely.
Social media and technology companies are known for their free meals, relaxation rooms, and fun workplace activities. Online shoe platform Zappos takes corporate culture to an entirely new dimension.
Comparing the dollars and cents of your job offers can be easy, but employers looking to hire and retain the top talent should also be investigating (and matching or beating) the additional perks that competitors are offering.
Career Development and Growth Opportunities
There was a time in the USA when stories would hit the news of a man who started in the mailroom and eventually became the CEO of a large and powerful firm. That upward potential was a strong motivator for young strivers to do their best at a company that preferred internal promotions.
The “consultantication” of the US workplace has largely done away with that, and most big firms today hire outsiders for executive positions, many of whom may not have company or even direct industry work experience. Providing (and highlighting) opportunities for career development, growth, and upward potential is a smart way to retain employees who want to advance in their careers and are not content with just “doing their job.”
Flexibility and Work-Life Balance
The 2020 lockdowns which resulted from the COVID-19 pandemic changed many aspects of the corporate work experience in the US. Many sales leaders found that their teams could be highly effective even while working remotely. Returning war veterans may have found the structure of the 9-to-5 office schedule enjoyable post-WWII, but today’s workers don’t view it as favorably as their predecessors.
If you want to retain the best people, you may have to be willing to allow them to enjoy their lives and find some flexibility and work-life balance. Whether that’s more time with their families, traveling, or simply working from home, find a way to keep them happy and their performance (and longevity) may very well increase.
Effective Communication and Feedback
One of the most crucial ways to support your people is to do so in a way that they actually feel supported. That may sound overly simple, but it’s quite surprising how often there is a wide disparity between employers and employees on what the reality is like for each of them.
The key differentiator between companies that do this well versus those that don’t comes down to communication. Talk to your people in a way that makes them feel heard, and accept their feedback in a way that makes them feel as if they have a voice within their workplace.
Creating a Sense of Purpose and Meaning
One of the most basic elements of the human condition is the need for a sense of purpose and meaning. Unless you are a dictator running a company in which people don’t have the option not to work for you, providing your people with a sense of purpose and meaning is one of the most essential tasks for good leaders.
The more people believe in what they are doing, the more care they will put into their work. The more purpose and meaning they find in their work, the longer they will stay at it. You don’t necessarily need to have company fun days or fill your hallways with motivational posters to inspire your team
You do, however, need to find a way to make each employee feel as if they matter to the organization as a whole, and that their piece adds something important to the larger puzzle.
Closing
Between lost loyalty and stiff competition, retaining good employees is now more difficult than it has ever been. Use the lessons outlined above to build an organization that makes people want to work for you and your employees want to spend their careers with you.
