A CFO asks a CEO: “What happens if we invest in developing our people and they leave?”
The CEO responds: “What happens if we don’t, and they stay?”
These seem to be catch-22 questions. Do employees stay because employers invest in their development, or do employers invest in employee development because employees have committed to stay?
Each party is looking for a “pre-commitment” from the other. Gallup’s 2017 research on the state of the American workforce reveals that 51% of employees in the U.S. is actively looking for a new job or watching for openings. This statistic is alarming. In the wholesale distribution industry where many business sectors are not considered appealing and turnover is already a critical issue, understanding why employees (especially star performers) leave your company becomes paramount.
Research shows that people leave their jobs for a number of reasons, and here are a few that stand out:
- They don’t like their boss.
- They don’t see opportunities for promotion or growth.
- They are recruited away with a better deal.
So what can distributors do to keep their employees, particularly their high performers? Here are five tips to spur further thought:
- Understand your values. What do you value as an organization? What is your attitude toward your people? Do you view them as an asset in which to invest, or as a cost to be absorbed? What have you done to show your employees that you have a vested, long-term interest in them? Answering these questions is essential, because your company’s values and beliefs set the tone for your culture, and they brand your company with either a positive or negative image. For millennial employees, this is particularly important. Millennials will work for a company for less pay if they embrace your values and vision.
- Develop your managers. The old mantra says: People don’t quit their jobs; they quit their managers. Ample research evidence supports this statement. Managers, particularly middle managers, are in a special position within an organization. They are the important medium between top leadership and lower-level employees, and they are the ones who allocate human resources in the execution of your corporate business plan. One manager with poor people skills can do serious damage to your company brand. Therefore, when you start to lose people, particularly top performers, one of the first places you need to look at is your managers. Identify which people management skills they do and don’t have, and close the gaps through training and development programs, job coaching and managerial mentoring.
- Know your employees. When a company is big, this can be a challenging task. However, to keep your employees committed to your company, you must demonstrate your interest in them at a personal level. What strengths does each employee have? Is each individual placed in a position that will maximize his or her strengths? What career development plan is in place for his or her long-term growth? When you invest energy in understanding your employees, they will appreciate your effort and work harder, engage more and perform better.
- Create growth opportunities. Smaller companies often struggle with providing employees with growth opportunities, because there are limited promotion opportunities available within the organizational structure. If this is you, think about growth in a broader sense. In our brand-new NAW book, Optimizing Human Capital Development, my coauthors and I outline different ways of engaging employees for career development, such as job enrichment, job enlargement and job rotation. These lateral movements, while not providing traditional upward promotion, are excellent opportunities to equip employees with different knowledge and skills needed for different job positions and in different contexts. In the long run, these moves enhance the employees’ competitiveness in the job market.
- Reward your employees. While today’s employees long for learning and growth opportunity, at the end of day, being adequately rewarded for their hard work and outstanding performance will keep employees committed. However, providing competitive monetary compensation and benefits is not the only way to retain your employees. Think about other creative ways to recognize your employees. For example, consider designing a flexible work schedule, allowing more vacation time and sick leave, organizing after-work social events and offering timely and frequent verbal recognitions for a job well done. These non-monetary incentives go a long way.
Just remember: Keeping your employees at your company doesn’t have to cost you a fortune. Often, expensive training and educational sponsorship alone does not guarantee employee retention. However, when you do make genuine emotional investments in your employees, your “currency for the soul” is likely to pay off with positive returns. So make an effort to get to know your people.
You may also want to read What Is Your Employee Value Proposition?