Today’s job market has become increasingly competitive with employers battling for top talent. Retaining high performers should be a priority for business leaders.
So how do we create a working environment where employees wake up inspired to go to work? Leaders can create a workplace where teams feel rewarded, appreciated, and supported by managers who develop and empower them.
These are five key factors that will influence employee retention in today’s job market.
1. Pay transparency
Be open about why and how the organization makes pay decisions. From an employee perspective, pay transparency leads to fairness because when leaders prioritize being open and transparent across all business functions, it’s clear that they have nothing to hide, so trust grows. Don’t just share the outcomes, but also explain your thought process, which further builds trust.
Context about how and why pay decisions are made enables people to do their jobs more effectively because they can see what they are working toward. More pay transparency equals more job satisfaction — and lower employee turnover.
With new transparency laws rolling out across the U.S., various states are sharing salary ranges with employees and job seekers to help give workers leverage to negotiate and to close wage gaps.
2. Career path visibility
Increasingly, the world of work is focusing less on hierarchical structures and more on skills, capabilities, and experiences. Employers will need to show clear and varied career progression opportunities to attract and retain talent.
A career framework can help you respond to what your employees are asking for, setting clear expectations and career-path visibility. Employees want to know where they stand and how they can progress. Career progression doesn’t always mean moving into a more senior role or one that involves people management, but it could mean taking on larger, more challenging projects.
A transparent career framework helps employees to plan their long-term career with your organization, not outside of it. This doesn’t mean there will always be a development or promotion opportunity available, but all of the opportunities will be clearly visible and employees will understand what they can do to reach the next level.
3. Rethinking performance management
If you were to ask employees what they think when they hear the term “performance management,” a common response is that it’s about managing underperformance. After all, if someone is an exceptional performer, why do you need to manage their performance?
In recent years, organizations have started moving away from appraisals at set times of the year and toward a process that is flexible and results in ongoing feedback and dialogue. Rather than competition, we should be encouraging collaboration and trust by shifting to using more positive language and a term that doesn’t imply that we can control and manage our employees.
4. Employee appreciation
We all like to feel valued and appreciated.
A job well done deserves dedicated recognition in the moment. In fact, recognizing achievements is one of the best ways to improve employee engagement.
Recognition could be anything from saying “thank you” after a productive meeting, to applauding someone via email and copying in their manager. Experiment with different types of gifts, financial remuneration, formal and informal recognition, and even public recognition through newsletters and award ceremonies to uncover what resonates most strongly with each individual.
It’s great to have a formal recognition program with monthly, quarterly, or annual awards for achievements or behaviors, but a spontaneous everyday conversation could also make a big difference.
5. A sense of purpose
Pay is critical for all employees. But once they’re settled, the paycheck alone is far less motivating. They will only stay in a job for so long if they feel bored and unfulfilled, so we cannot just look at pay in isolation. A clear sense of purpose, both individually and at an organizational level, is critical.
A clear vision statement can inspire loyalty and innovation, provide a sense of purpose, and help to define short and longterm goals. However, many organizations’ vision statements are unnecessarily long and meaningless. A good vision statement articulates what your organization and people are working towards that will make the world a better place.
As well as delivering a strong sense of purpose, supporting your community through donations and giving employees time off for volunteering will directly contribute toward building a positive Workplace.
Employee retention should be a top priority for leaders. No longer is it enough to pay your employees a “decent” salary. Instead, fulfill their purpose, demonstrate their potential career trajectory, and show active appreciation.
Rameez Kaleem is the founder and managing director at reward consultancy 3R Strategy and the author of A Case of the Mondays.
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