Finding the right people with the right skill sets continues to be problematic for many companies, but what about retaining employees? Is that a challenge as well?
U.S. manufacturing output rose at its fastest pace in more than two years in the second quarter, suggesting the economy is regaining enough momentum to lift growth throughout the year. Federal Reserve Chair Janet Yellen told lawmakers this week that the economy continued to improve, but she noted that the recovery was not yet complete because of still-high unemployment. Nevertheless, labor market conditions are looking up, with the unemployment rate falling to a near six year-low of 6.1 percent in June, and job growth exceeding 200,000 for a fifth straight month.
The result is that factories are hiring. Indeed, according to a recent report from the Dallas branch of the Federal Reserve Bank, 21 percent of the companies participating in a recent survey reported net hiring while eight percent reported net layoffs. As jobs open up and more companies pick up the pace of hiring, it would seem then that employees will begin to not only see other jobs open up, but they will be more willing to leave a job to take another.
The result is that if hiring conditions continue to improve, small employers will have to work harder than ever to retain their best workers, says Tom Gimbel in a recent BusinessWeek article. Workplace culture is playing a bigger role in overall job satisfaction and also is a reason why smaller companies are losing key players to the Googles of the world, says Gimbel, president and chief executive of LaSalle Network, a staffing and recruiting company.
Anytime workplace culture or workplace environment comes up, I think salary and compensation has to first be examined. People may like their jobs and coworkers, but if money—or lack of it—is an issue and they know they can make substantially more money at the same job somewhere else, it may just be a matter of time until they leave. However, if the company pays fair salaries and also has the appropriate long-term incentives in place to make employees feel like they do have a stake in the company’s future, then additional incentives may be something else to consider.
So the challenge then is to keep employees satisfied with their company. That’s sometimes easier said than done though since it’s an emotional issue, so I was interested to see some tips for retaining top talent.
John Mills, executive vice president of Business Development at Rideau Recognition Solutions, recently wrote in an IndustryWeek article that it’s imperative to first identify the company’s most-critical benchmarks. By measuring business performance, a company can determine which workers are needed most—and which among them are the top performers.
I was interested to see Mills recommend companies develop incentives for work that “moves the needle.” That’s because, as he wrote, once company leaders understand the mechanics of how their business creates value, they can develop incentives that reward behaviors that lead to growth and profit.
One recommended practice is to reward often, and do it publicly. The key here is to be quick with the praise because taking too long may actually irritate people. But as Mills notes, the form of rewarding performance isn’t necessarily as important as communicating the appreciation. Whether it’s an email to the whole team, or a gift card that buys a lunch or two, employees just want to know that their efforts are appreciated, Mills wrote.
Obviously, if an employee hates their boss or the job itself, they most likely won’t be a top performer anyway—and that’s another whole labor management challenge. But what do you think about additional incentives and public praise? Everybody likes at least an acknowledgement that they went above and beyond what is expected. Do you think a Spot Award or a gift card, or at least a group-wide email, helps keep the happy people happy?