Engaging high performers in today’s talent market is difficult. In fact, according to PayScale’s Compensation Best Practices Report (CBPR), 66 percent of surveyed organizations agree that retention is a major concern. This is an increase of seven percentage points over the previous year.
Additionally, 47 percent of surveyed organizations say the strong job market has increased their turnover rate.
So what does that mean? Organizations are intentionally investing more in their employees.
According to the CBPR, 23 percent of respondents said their biggest HR investment for 2019 would be employee training and development. Recruiting and compensation changes (15 percent) tied for the second-highest investment for 2019.
Disengaged Employees Lead to Higher Turnover
Five to ten years ago, employers had the upper hand in hiring. However, in this hot economy and job market the tables have turned. Rates of voluntary turnover – employees quitting of their own accord – are on the rise. According to the Work Institute, 27 percent of employees voluntarily left their jobs in 2018. The result is a shrinking talent pool. Armed with more choices, employees are now in control. It is predicted that these trends will continue into the next few years. By 2023, an astonishing 35 percent of employees will voluntarily leave their jobs each year to work for another organization.
High levels of turnover are a strong indicator that your employees are not engaged.
What are some of the top reasons employees left their jobs in 2018?
Seventy-seven percent of people quit for reasons that could have been prevented by the employer, including career development, work-life balance and manager behavior.
Three Essential Elements for Retention
Each of the following elements are essential for creating an effective employee retention program. You might not have an unlimited budget or ability to increase payroll, but these methods are proven ways to get the most from your employee investments.
1. Learning and Development
According to LinkedIn’s 2018 Workforce Learning Report, 94 percent of employees would stay at an organization longer if it invested in their career development. In fact, there are many positive outcomes to providing learning opportunities including increased motivation, job satisfaction, feeling valued by the employer, and increased eNPS scores.
However, there are a number of barriers to creating learning and development programs. Many employers fear that training can be costly. Others have difficulty gaining leadership buy-in. Still others fear there is too much of a time commitment.
“The only thing worse than training employees and losing them, is not training them and keeping them.”
Six Steps to Create an Employee Development Program
There are a number of approaches to create and implement an effective employee development program. Think about where you are along these six steps, and what is needed to get to the next level.
- Align Training With Culture – This is an often overlooked, yet very important step to ensure success. Look at the core values of your organization, as well as the competencies and skills you expect all employees to have. Your overall engagement initiatives can help enhance organizational values. This is also a great opportunity to change or improve your culture.
- Choose a Training Solution With Content That Addresses Every Need – Try a blended approach. Content should address a broad range of topics, targeted to both teams and individuals.
- Use Microlearning – In our hyperconnected culture, distractions abound and attention spans are getting shorter. Using content that is short and easy to digest enables employees to make the most of their time and focus. Seven minute increments of content is the recommended maximum.
- Get Your Leaders Excited – In order for your program to be successful, your leaders need to be involved and engaged. Above all, you need their support and enthusiasm as champions of your program.
- Give Your Employees Time for Training – Create a culture that values learning. Simply providing resources is not enough. Make sure your employees are aware of the training opportunities that are available to them and ensure they have the time to use them.
- Commit – If training is to impact turnover rates and engagement, it requires commitment from leadership and managers.
2. Internal Mobility
An internal mobility strategy is the second element of the framework. This component sends a message to your employees that you want them to be successful and you want to help them gain the skills they need to have a successful career with your organization.
Studies by Deloitte’s Bersin reveal that at high performing organizations recruitment, retention and internal mobility are all linked. These high performing organizations spend meaningful effort and energy creating experiences and expectations for talent that encourage growth, learning, engagement and communication.
Five elements for creating a culture of internal mobility:
- Models for Advancement – Expose your employees to a narrative they can model their own careers on.
- Clear Career Ladders or Frameworks Plus Visible Opportunities – Employees should know what options are available and what they need to work on to step into these opportunities. It’s also important to be transparent and make these opportunities visible across your organization.
- Recurring 1:1s – Recurring 1:1 meetings between employees and managers to talk about career goals and development. These meetings should be collaborative in order to create a roadmap to achieving their goals.
- Role Clarity and Transparent Promotion Process – Having clear guidelines around how promotions happen and when they happen can help avoid employees becoming disgruntled.
- Coaching – Coaching helps employees gain insight and clarity into their strengths and opportunities.
3. Transparent Pay Progressions
The third element to keeping high performers engaged is having clear pay progressions. In order to achieve this you must first make sure you have established a pay range for each position based on market data. Establishing clear pay ranges sets a foundation for having effective communication with your employees about their pay.
It’s also important to reward people for business results. Some employers may choose to compensate based on individual performance. It’s most effective when employees align with managers to set goals based on business objectives.
Additionally, it’s important to communicate your expectations clearly. Leaders must determine which level of transparency and communication is appropriate for their organization.
Steps for Creating a Salary Range
These are the most important things to consider when creating a salary range for a role. Pay ranges should be built either for each position or each job level and grade. The salary structure you choose will depend on the number of positions you have. If you have fewer positions, it is recommended to build ranges for each position. On the other hand, if you have a lot of positions, you may want to build ranges for job levels.
- Determine the Midpoint of the Role – Consider how critical the role is to your organization, what stage your company is in, what you can afford, what you can budget and how much to spend on base pay vs. total rewards.
- Benchmark the Job to the Market – A clear and updated job description is useful. Consider essential function and key skills for the role – not just the job title. PayScale’s Insight Lab is a great tool for benchmarking jobs and positions.
- Determine Range Width – The wider the range, the more opportunity there is for employees to move up in salary.
- Have Clear Guidelines – Be sure to have clear guidelines about where employees enter the range and how they can move up in the range when an employee is promoted.
Remember that employees want and need learning and development opportunities. In addition, it’s not enough to simply hire new employees. Recruitment, retention and internal mobility are all linked. In particular, high performers need to stay engaged and their compensation should keep pace with their progress. Lastly, you should foster a culture of growth and mobility at your organization by identifying both long and short term solutions and investments.
In today’s strong economy and hot job market, employee turnover is at an all-time high. Use this framework to reduce costly turnover for your organization.
How is your organization keeping top performers engaged? Let us know in the comments below.