Employee retention strategies that actually work
In today’s ever-evolving realm of business growth, Talent-related challenges are top of mind for many leaders. “Talent is everything…[and] as we go through growth curves, recruiting and retaining is becoming ever more difficult,” says my client (who we’ll call Martin), CFO of a SaaS scale-up. The cost of replacing someone is nearly two times the employee's annual salary, not to mention the negative impact on critical business factors like morale, client relationships, and innovation. Unfortunately, as more companies tighten their belts and ask their people to “do more with less,” the traditional employee retention strategies of offering a promotion or raise isn’t always an option. This can create major problems, as recent surveys have identified that the number one reason people leave an organization is a lack of career mobility.
So if a formal promotion or a boost in salary isn’t in the cards, how do you hold on to your top-performing employees?
Identify what motivates them
People stay in a job for a variety of reasons. To understand your peoples’ individual motivations, you must also understand their ultimate goals. The only way to know what motivates someone is to build a trusting relationship, but this essential piece of the leadership puzzle is often undervalued. According to Gallup research, over half of exiting employees (51%) say that in the three months before they left, neither their manager nor any other leader spoke with them about their job satisfaction or future with the organization, underscoring the urgency for implementing effective employee retention strategies.
I have two coaching clients who are experiencing this issue right now. I’m coaching one senior executive who is unsure about his future in the company because the CEO doesn’t provide feedback or speak with him about his professional growth. While he’s not a flight risk (yet), he’s constantly playing out scenarios about how his role might evolve, and he’s begun to view his peers with distrust because the CEO’s lack of communication has created a “game of thrones” mentality.
The other client is a high-potential, senior leadership team member who has entertained job opportunities outside the firm because her leadership assumes she’s the heir apparent to lead her business unit, yet this is not what she wants. In fact, she’s interested in another role internally that would allow her to work in her home city (vs. flying from Charlotte to New York every week) and give her greater P&L responsibility. Because of the lack of communication, she’s seeking career opportunities outside the firm as she’s concerned that her leadership will not be receptive to her desired pivot, and her departure would be a big loss for the company. These narratives perfectly illustrate why relationship-building is so important when it comes to retention. Without a change in employee retention strategies, both organizations could potentially lose extremely high-performing talent.
If your people know that you value them beyond KPIs, they’re much more likely to share their inner motivations. In your one-on-ones, consider taking an extra five to ten minutes to catch up informally, or make time for a coffee. Let these leaders and executives know that you care about and are invested in their professional goals. I advise an additional meeting with each direct report every six months or so, with the goal of discussing where they want to go professionally. What do they consider their “top of the hill”? What skills do they need to build to go further? What experiences do they want or need to help them reach their goals? Asking these kinds of questions - and providing valuable feedback - is not only an application of employee retention strategy, but a demonstration of your investment in them and can alert you to opportunities they’d benefit from.
In a recent presentation I gave on this topic, one participant offered this insight; “[In some instances,] individuals may not know what their goal is, so perhaps ask them to think back on the past quarter, and make a list of the activities that are really energy gaining vs. energy draining. Someone may not know exactly where they want to go professionally, however you can start to build a direction where you want to be focusing more and more energy as you grow.”
Ask yourself: What is the “top of the hill” for each one of my direct reports?
Define reality and give hope
When you ask high-performers about their motivations and goals, it is likely that you’ll hear answers like “money,” “advancement,” or “career progression.” How do you keep someone motivated when you can’t pay them any more, promote them, or give them more responsibility in the near term?
To manage this challenging situation, start with wisdom from a great leader, Kenneth I. Chenault: “the role of a leader is to define reality and give hope.” The balance between transparency and inspiration can be difficult to strike, but done correctly, it is a powerful trust-building tool. If opportunities for career advancement aren’t feasible at present, it’s best to be honest about it. As one participant of a talk I gave recently shared, “New opportunities are created during moments of growth. I can’t give someone a large team to manage if the company can’t yet afford to hire the staff.” That said, remind the employee that this is a moment in time, or what I refer to as the “long winter,” and consider what you can deliver in the short term.
This is where understanding your team’s goals can be especially helpful. If you know what is important to them and what skills and experiences they need to develop to get there, it’s easier to keep them fulfilled and motivated. For example, consider assigning them more challenging work that is linked to the skills they want to develop, the relationships they want to build, or the impact they want to make. Create space for them to share what they need from you to be successful in that work. Once you have a good understanding of their aspirations, you’ll be better equipped to make agreements about their goals that possess clear milestones for future alignment and feedback.
Ask yourself: What agreements have you made about goals with your top talent?
Influence your organization’s culture
While retaining your direct reports will certainly go a long way, it likely won’t impact the broader organizational issues at play. To affect real change, creating a company culture that retains and creates more rising stars. Consider your ideal employee profile, lifting from the same approach that you would leverage when identifying your ideal customer. What are the commonalities of your top-performing executives and rising stars from a psychographic perspective? What do they care about?
Next, consider your employer value proposition. How are you differentiating your organization as an employer given your ideal employer profile? This could be a variety of things, such as the impact the employees will make, learning and development opportunities, or flexibility in terms of remote or hybrid work or working hours. Leaders should combine this value proposition with the organizational vision for maximum impact. Christina Ross, the Founder and CEO of a tech scale-up called Cube, thinks of great leaders as “Chief Repeater Officers.” The Rule of Seven says that customers need to see your brand at least seven times before they commit to a purchase decision. Your “internal customers” - your current and potential employees - are not that different. I encourage you to communicate your compelling vision and value proposition with unwavering consistency. This will allow your people to navigate through uncertainties with purpose and determination.
Ask yourself: What steps is my company taking to consistently communicate how the organization delivers on what my ideal employee values the most?
Retaining high-potential leaders and executives demands consistent effort and innovative employee retention strategies. Taking the time to build strong relationships with your people, nurture and enable their professional goals, and make positive organizational change will ensure that your stars feel challenged, appreciated, and fulfilled.
“When leaders throughout an organization take an active, genuine interest in the people they manage, when they invest real time to understand employees at a fundamental level, they create a climate for greater morale, loyalty, and, yes, growth.” – Patrick Lencioni