We know that it’s far cheaper to retain an employee than to replace them. But in order to understand how to retain, we first need to understand the elements that go into an employee’s decision to stay or leave their job.
Overall compensation is the most straight forward of the three. How much do they make? What are their benefits? And – the most critical factor – how does it compare with the salary and benefits they would get for doing essentially the same job elsewhere? This is the area that a manager likely has the least amount of control over – HR people have their salary ranges and their benefits packages and, whether they are fair market value or not, there’s usually not much to be done about it unless you are a high-level executive. As a manager, make sure you’re documenting reasons to argue for salary increases and promotions, so that you can make the case. It also may not hurt for you to ignore the official vacation policy, and allow your rock star employees an off-the-record extra day or two here or there.
Career progression is the notion that this job is helping them to advance along their desired career path. Does their day-to-day work help them to develop the skills and experience necessary to get them to their professional goals? In this case, it’s critical for a manager to understand what an employee’s long-term goals are, and to help them draw correlations between the things they are doing today and how it will help them out tomorrow. It’s also important to budget for professional development activities, like conferences or trainings. Not only will the knowledge they gain help them do their current job better – it will also set them up for success tomorrow.
Job satisfaction is the biggest, and most complex, element of the three because so many elements go into whether an employee is happy with their job: Do they like their manager? What’s the office culture like, and how do they fit in? What’s the workload look like? How much are they commuting? How’s their work/life balance? Are they constantly impeded by organizational politics and obstacles? A manager can’t necessarily control all of the factors that make up this category, but the critical idea here is that they shouldn’t abdicate all responsibility either. It is a manager’s primary job to make sure that their employees have the structures and support system they need to be successful. Make sure you’re taking your employees’ temperature regarding their overall levels of satisfaction, and the things they would change to make it better. When you can help them, you have an obligation to. This isn’t about being warm and fuzzy – it’s about getting the most out of your employees and saving your organization the money it would cost to replace them.
Not all elements are equal
Though we’re visualized all of the elements above as being roughly equal, reality is a bit more messy. For some employees, overall compensation will be the most important factor, and therefore weighted much more heavily in the decision-making process. They may be willing to put up with a lot less job satisfaction if they get paid an above average market rate for their job. For others, it will be exactly the opposite – they wouldn’t take all of the money in the world for a job which made them miserable. There is no right or wrong distribution here – it all comes down to individual personality and preference. Over time, any manager should be able to develop a sense of which elements are most important to their employees.
It’s critical to note that, while none of these elements are mutually exclusive, high scores on two out of three of the elements can mitigate a low score on the third. So, for example:
- If an employee’s compensation is far below market value, but they love their job and the office culture, and it’s helping them to progress professionally to a higher level by budgeting for professional development, they may be willing to overlook the lower salary.
- If an employee’s job satisfaction is in the toilet, but their job is helping them to advance professionally, and their salary is above average, they may be willing to suffer for the greater good and big picture professional goal.
- If a job is not helping an employee to advance professionally, but they really like the people and the money is good, they may be willing to overlook that it’s not on their desired career path.
The problem is not when you have low scores on one element, but when you have low scores on at least two of them. If an employee is miserable, and the job isn’t on their desired career path, a great paycheck will likely only mitigate it for so long. And if an employee scores “meh” or low scores across the board, they are likely browsing employment ads at work.
Check in regularly
Not sure where your employees stand on these issues? You may be in a position where you can’t do anything about the compensation, but check in with employees once a week to make sure they are satisfied with their job, and it’s moving their career in the right direction. If they aren’t, it’s your job as a manager to set it back on the right track.
Source: Zen Workplace Insights