The Great Resignation is proof that employees hold all the power. Two years of pandemic-induced reflection has created a workforce no longer willing to put up with a job, manager, organization, or career that's not working for them.
This has put employee retention in the spotlight, and with the candidate skills shortage in many industries and functions increasing due to an aging workforce and rapid acceleration of automation, employee retention is expected to remain a critical business priority for at least the next decade.
Companies are tying themselves in knots trying to hold on to their staff, especially against a backdrop where poaching is fierce and wages are increasing at light speed in some sectors—not to mention the exorbitant sign-on bonuses that are becoming commonplace.
A constant stream of articles addresses which benefits are most effective for employee retention and whether offering hybrid work or flexible hours makes an impact.
Offering both options can aid retention, but it misses the point. Increasing employee engagement and retention is much easier—and much more basic—than this. And it doesn’t have to cost a thing.
Research shows that the key to employee retention is manager quality, their connection to their staff, and their comprehension of what their team needs to be fully engaged to want to stay. Then leaders must deliver on those expectations or manage them appropriately when they cannot.
Three data points to back this up:
- Gallup finds that 70 percent of the variance in employee engagement scores is due to the employee’s direct manager.
- Leadership IQ finds that the highest performing employees spend an average of six hours per week with their direct manager.
- A 10-year study of chief executives by Navalent corporation found that the highest performing CEOs “study and meet the needs of key stakeholders,” including their direct reports.
This is not new information. So why do so many companies continue to promote based on technical skills instead of the ability to lead a team, and why are so many workplaces still toxic environments?
It’s because, up until recently, organizations could get by with this behavior. The power balance was firmly in the employer’s favor, and companies could replace people fleeing poor managers.
But those days are gone. The ability to attract and retain the right people will make or break organizations’ ability to survive—much less thrive—this decade. And the workforce is now empowered and asking for more.
We are in a significant paradigm shift, shrugging off centuries of command-and-control leadership and decades of managers doing more with less, which has resulted in leaders spending less time with their teams and widespread disengagement.
The transition for corporations will be slow, though. Many senior leadership teams are only now realizing that that world has changed and will not return. Only once they embrace this can their businesses begin to take meaningful action, which will take time.
Organizations cannot replace bad managers overnight. We must train and coach those who wish to step up to become true leaders. We must reimagine our promotion criteria and our hiring processes to screen more thoroughly for leadership skills. And we must give our managers the time and space to lead.
So, what do we do during the transition? How do we hold onto our employees before our senior leadership recognizes the new world in which we live?
One simple step is to train managers to conduct structured one-on-ones with their direct reports and, as the Harvard Business Review article says about the Navalent study mentioned above, to “study and meet their needs.”
This can be a daunting challenge for time-poor managers, but it doesn’t have to be. Reviewing more than 5,000 exit interviews, I determined nine key things that most employees crave, which I call currencies of choice.
People want to:
- Work for a company with a compelling purpose and values aligned to their own.
- Work for a manager they trust, respect, and whom they know cares about them.
- Feel like they belong.
- Be appreciated in the appropriate way.
- Have a voice.
- Know how to be successful and how that success is measured.
- Learn, grow, and develop in their careers.
- Have agency, control, and choice.
- Be able to spend most of their day doing work they love and do well.
Training managers to have conversations around these nine currencies of choice has proven to be wildly successful in increasing employee engagement, retention, productivity, and profitability per head.
For a deeper dive, join me during the ATD 2022 International Conference & EXPO for the session, “Mind Reading for Managers: 9 Keys to Engagement and Retention.”