Research finds four approaches to retaining employees.
By Didier Elzinga
If you work in and around tech, then you are aware of just how intense the competition for talent is. As a result, the issue of employee retention is a priority for the majority of global organizations. There’s more to this than fears around churn and the associated headaches with replacing high potentials: it’s about staying competitive and innovative.
Not surprisingly, companies with strong cultures are often the innovators and industry leaders in their field. However, such organizations with highly engaged employees should not expect them to stick around for long. People analytics software company Culture Amp’s latest benchmark report finds that the percentage of employees who could still see themselves at their company in two years time dropped from 70 percent in 2013 to 58 percent in 2014.
So how can organizations work to better retain employees?
The research report looked for key drivers of employee engagement by analyzing data across engagement components -such as confidence in company leaders or open, honest two-way communication -to identify what were the most consistent predictors of highly engaging companies. Each individual’s response was measured and compared with the answers to the engagement questions in order to determine what factors are most strongly related to overall engagement.
Before looking at what actually keeps employees engaged, it’s worth quickly pointing out what it’s almost never about: compensation. The survey found that only 35 percent of employees said they would be looking for a new job if they didn’t get raise. Beyond that, pay rarely showed up as a primary factor of engagement. Also, the clichés about tech companies in relation to quality of work life -the quirky workspaces, the unconventional benefits, the ability to bring your dog to work -were also not among the top drivers of employee engagement.
What really stood out for employees were:
- Organizations that offer the means to develop skills;
- Companies that effectively direct resources toward their goals;
- Leaders who demonstrate that people were important to the success of their company; and
- Organizations that allow people to make a difference in the world.
The research found that companies with higher scores on these drivers had engagement scores approaching 80 percent. Those organizations with low scores on the above drivers had engagement scores below 65 percent.
1. Organizations that offer the means to develop skills. Forget about traditional hierarchical progression for employees. Development of the high-performing employee needs to be creatively addressed. Organizations need to provide opportunities for employees to transition into roles that fit their succession schedule or to learn completely new skills for their tools. The work environment needs to foster development rather than rely on the more traditional structure for employee advancement. Employees want to feel invested in, and that they are working collaboratively with managers and the company. They want development plans to be sincere and well-thought. The research found that organizations must ensure that skill development plans are tracked and managed.
2. Companies that effectively direct resources toward their goals. What employees highly prize is the appeal of working for organizations that exhibit a strong daily commitment to quality and improvement. Employee engagement levels are higher when the companies have strong scores for recognizing great customer service.
3. Leaders who demonstrate that people were important to the success of their company. Organizational leaders need to socialize, communicate, and connect more than most think. When new tech companies are launched, founders and leadership teams are typically highly visible. But as the company grows, a business as usual approach can take root. Leaders are often surprised to see their leadership scores increase during a crisis -and this is largely due to the fact they are spending more time communicating with their employees.
Top-level executives often think for months about changes in direction or updates to strategy, then carefully articulate and communicate it just once or twice. But changing management takes time and changes to business need to be communicated repeatedly. Employees want leaders that are open, transparent, and even vulnerable. Workers don’t want to be told everything is fine if it is not. Organizations don’t want their employees wondering: are they telling the truth or just what they think we want to hear?
4. Organizations that allow people to make a difference in the world. While there is some appeal to the perks associated with tech jobs, an even bigger driver of engagement across companies is the perception that a company allows its employees to make a positive difference in the world. Employees want to feel that their work is meaningful. This doesn’t always need to be on a global scale, and it can be as simple as making an impact at work -that feeling they contribute in a valuable way.
In today’s landscape, the talent market is fiercely competitive and organizations need to take the necessary steps to develop and grow a strong company culture. Seeking feedback for companies is crucial, but leaders must be receptive and clearly demonstrate that employees are heard and that their input is considered, whether the feedback is positive or negative.
“In order to continually improve, a company needs to build a culture of feedback,” says Neil Blumenthal, co-founder and co-CEO of online eyeglasses company Warby Parker. High-quality feedback from employees ensures “that we continue to learn, grow and challenge ourselves.”
What continues to surface around organizations that employees would recommend to their network as a desirable place to work is access to resources that enable them to do their jobs, having a manager who cares, and working in an environment that encourages innovation.
Didier Elzinga is CEO and co-founder of Culture Amp. The report used data from 60,000 employees across 100 of the leading innovative tech companies and can be downloaded at http://gday.cultureamp.com/new-tech-benchmark-2015/