In the last few months in my travels to lead workshops with clients and to present at various HR and strategy conferences around the world, I’m hearing a repeated refrain about employee retention. In my (admittedly unscientific) survey of these large, global companies, the importance of culture as a main component of a retention strategy is once again rising to the fore.
Some companies have maxed out their compensation and cannot compete for talent based on pay alone. Others know the only real difference between what they have to offer top talent from the competition is the strength of their workplace culture as an exciting, innovative and appreciative environment. Or, as a recent Chief Executive magazine article put it:
“If the trend of rising company earnings is any indication, the momentum is likely to continue. For employers, that means what it always has: an uptick in competition for the best talent. At the same time, barely out of the recession, companies can’t yet afford to make huge investments in salary increases or large bonuses. By developing employee recognition programs, employers can improve—in some cases dramatically—employee engagement levels, retention and performance. ‘Employee recognition is a potentially very low-cost engagement driver that can have a very, very significant impact on financial performance,’ says Ken Oehler, global practice leader of engagement at human resources consultancy, AON Hewitt.”
That’s the power of strategic, social recognition done right – it’s the fastest, most cost effective way to impact employee engagement and retention. Indeed, some of our clients have realized double digit increases in engagement and retention in months, not years.
How is this possible? It’s not just telling employees “thank you.” It’s going much deeper and telling people very specifically how they and their efforts demonstrated a core value while helping to achieve strategic objectives. It’s giving employees context for the value of their efforts within the bigger picture. We all seek greater meaning in our work. Sometimes, we just need to be reminded what it is.
And when it’s done right, the benefits are stark. AON Hewitt’s Oehler continues:
“Oehler recently studied the relationship between recognition and engagement and found evidence of a strong connection. For starters, when employees were asked to name their top drivers of engagement, recognition came in at No. 2, well ahead of pay at No. 5. Aon also looked at the lag effect of engagement to sales growth and found that companies with above-average engagement scores correlated with 19 percent sales growth vs. companies below the norm on engagement, which reported only 6 percent sales growth.”
How do you differentiate your organization to ensure your top talent never want to leave?