One of the biggest questions for any 21st century business is how to retain its top performers. It’s a well-known fact that the modern generation spends less time in a job than any of their predecessors and this has left organisations wondering how they can keep hold of their very best talent. This isn’t helped by news from a recent study that suggests British employees can be lured away from their jobs by just a 5.3% pay rise. But is money really the best retention tool? And if it’s not, what is?
The global study, conducted by the CEB, found that workers in emerging economies would require a much larger pay rise to switch employers than their counterparts in developed nations. The average UK employee could be swayed by a £1,722 increase in pay when taken in relation to the average wage of £26,500. However, In Indonesia, professionals would need to see a rise of 20.6% while in Brazil this stands at 20.1%. This highlights that British employees are often very hard to retain and are looking for more than just a financial incentive. So how do you hang on to your best performers if money doesn’t seem to cut it?
Firstly, businesses should understand that any employee motivated purely by money alone isn’t going to be fully engaged with the organisation. Staff engagement is absolutely vital in retaining top talent and this is what companies should be focusing on. By providing interesting work and charismatic leaders for employees to work under, businesses should note a growth in job objectives being met and a rise in staff retention. In fact, research has found that fully engaged employees are seven times more likely to be identified as an excellent performer by their manager. They’re also four times more likely to stay at an organisation than an unengaged peer.
Failing to keep employees engaged can actually do a lot more damage than many businesses would care to imagine. Lower levels of staff engagement can lead to higher absenteeism and lower productivity and this can have enormous knock-on effects. To highlight this, some studies have estimated that disengaged employees could cost the UK economy the equivalent of around 2% GDP per year, or £30billion.
It’s obvious then, that keeping your employees engaged is absolutely crucial. However, there are other things organisations can do to hold onto their best performers. Giving people the ability to balance their professional and home lives and work flexibly, for example, can make employees feel valued and understood by their employer and this is much more likely to make the average professional stay than a pay rise.
Organisations should also consider the types of leaders they have in place. It has been said that professionals leave employers because of management rather than the company itself and this may be what’s pushing some people away. Businesses simply have to ensure they have a leader who is aligned with the organisational culture and can effectively manage their employees to minimize turnover. In fact, one study has even suggested that this is the number one reason for employees changing roles.
It’s clear that businesses need to consider a number of factors if they want to improve their staff retention, aside from financial incentives – chiefly staff engagement. That way they’ll have a focused, motivated and happy workforce that’s more loyal to the brand.
Do you agree that keeping staff engaged is more important than pay?
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