Are You Trying to Retain the Right Employees?
The Covid-19 pandemic has triggered the latest battle in the war for talent. Hospitals, desperate for nurses, have offered $40,000 sign-on bonuses. Wall Street firms are increasing base pay for entry-level analysts to six figures. Even fast-food operators are promising retention bonuses between $500 and $1,500 to attract new talent. While these approaches may be effective for filling vacant positions, they are unlikely to yield long-term employee engagement and high performance. Worse, these approaches might actually engender the “dysfunctional retention” of reluctant talent: an employee who prefers to leave but ends up staying and performing poorly.
Rather than relying heavily on one-time incentives that are at best a knee-jerk reaction to keep bodies in seats, organizations need to take a hard look at how to identify and create engaged, enthusiastic employees. They should allow “reluctant stayers” to leave and focus on creating workplaces where “enthusiastic stayers” want to stay and thrive. In recently published academic research, we identify and quantify the impact of retaining both “enthusiastic stayers” and “reluctant stayers” them and challenge the assumption that all employee staying is uniformly good.
We studied more than 450 employees at two non-profit organizations for two years. Participants were each assigned to one of four categories based on a combination of their turnover intentions measured via surveys at four different times and their actual turnover during the two-year period. Individuals who indicated they intended to leave their organization and then actually left were classified as “enthusiastic leavers,” while those who indicated they intended to remain in the organization and then left were classified as “reluctant leavers.” Similarly, those who intended to stay and stayed were classified as “enthusiastic stayers,” while those who intended to leave but stayed were classified as “reluctant stayers.” We found that 38% of employees were enthusiastic stayers, 42% were reluctant stayers, 16% were enthusiastic leavers, and 4% were reluctant leavers. While every organization will be different, our data seem to corroborate Gallup’s 2020 findings that only 39% of U.S. workers are “engaged at work” (those who are highly involved in, enthusiastic about, and committed to their work and workplace).
Knowing who is likely to enthusiastically stay is critical to organizations. When quantifying year-end financial results of the fund-raisers in our sample, we found that enthusiastic stayers raised $3,155,190 on average whereas reluctant stayers raised $2,238,134, a difference of more than 40%. Therefore, beyond simply just not leaving, enthusiastic stayers proved to be particularly valuable for organizations because of their superior productivity.
So how can organizations distinguish between enthusiastic and reluctant stayers? Our findings indicate that the key may reside in understanding the degree to which employees feel embedded in their organization. Among a set of well-known predictors that include job satisfaction and job performance, job embeddedness — the degree to which a person is connected in the social fabric of an organization — was the best predictor of whether an employee would be an enthusiastic stayer. It is composed of three sub-dimensions: fit with the organization’s culture, relationships with coworkers, and the sacrifices a person would make if they left. Following are research-based suggestions to identify and engage enthusiastic stayers through these dimensions and increase the odds of retaining the right talent.
Employee Perceptions of Fit
Organizations typically invest great effort during the hiring process to identify candidates who are a good cultural fit and whose skills fit the job. But how many organizations track fit over time? Employee perceptions of fit are dynamic; research shows that employees often reassess whether they fit in an organization when changes occur in roles, coworkers, and company structures. And the Covid-19 pandemic has certainly prompted its share of workplace changes. Assessing the degree to which an employee can “see a future for myself in the organization” helps to assess whether the initial fit continues.
Companies can also go beyond assessing employee fit to actively promoting it. One example is an app developed by GE to assist with succession planning. The app uses the historical movement of employees worldwide plus the relatedness of jobs based on their descriptions to find potential job opportunities throughout the organization, not just in a country or a division. This gives people more jobs to consider in crafting a career path — one that fits with their goals and aspirations. Because these possibilities are grounded in real experience captured in large datasets, they empower candidates to choose their own path with confidence.
Employee Relationships
Decades of research point to the importance of an individual’s work relationships with others in decreasing the likelihood of voluntary turnover. With the more recent development of organizational-network-analysis tools, many organizations are now able to assess with relative ease internal communication, advice, and trust networks. Understanding these networks can facilitate the identification and management of key interactions, but they may also be used to glean valuable insights into each employee’s connections with others. Contrasting employees’ advice networks with their virtual communication networks may reveal cases where the transition to remote work has disrupted meaningful work relationships.
Separately, organizations can facilitate opportunities for families to engage with community support networks. For example, during the pandemic, the Parents at LinkedIn (PAL) Employee Resource Group has launched many community initiatives, ranging from Father’s Day activities to art projects. Connecting families and communities reminds people they are not alone in working through work and family stressors. Such activities make salient a broader support system that links employees with supportive members of the communities they call home. Strengthening those bonds will reduce the likelihood they will be willing to jump ship and take a job in another geographical location.
Intangibles that Make It Hard to Leave
Tangible rewards such as pay and bonuses, are easy for competitors to match and, therefore, convey no lasting competitive advantage. In contrast, asking employees what they value most in their relationship with the organization and seeking to provide it can create sustainable advantages. For example, a number of national surveys have highlighted the amount of pay people are willing to give up in order to secure more flexibility in when, where, and how they work. In short, this autonomy has real value.
Because not all employee contributions are equal, whom should an organization prioritize when deciding which people to grant this flexibility? We recommend taking multiple factors into consideration. Rather than rely solely on performance evaluations, organizations should aggregate ongoing information about raises, bonuses, training assessments, peer evaluations and other outcome data to identify those who are most likely to be enthusiastic high performers. They might also consider making it easier for those who are not enthusiastic to leave like Amazon did with its “Pay to Quit” program. Each year Amazon offers fulfillment-center employees a one-time payment to leave the company. Those who choose to stay do so consciously, which leads to more engaged, committed, and high-performing employees.
The pandemic changed how we work and how we view work. To reverse the tide of the Great Resignation, leaders need to center attention and energy on the conditions that will help employees enthusiastically, rather than reluctantly, stay and thrive — namely, a sense of fit and purpose, a support system at work and in the community, and personalized packages that would be hard to find anywhere else.
This content was originally published here.