How to Attract and Retain Employees When Pay Isn’t Enough
February 23, 2023
By Heather Nezich, courtesy SBAM Approved Partner, ASE
In a world where the labor participation shortage is not going away, employers are looking for real ways to drive productivity, performance, retention of talent, and new strategies for attracting incoming generations. Just paying employees more is not driving major improvements and may not be financially sustainable over time. What else can be done?
Today’s employees have priorities that go beyond compensation. This includes:
- The ability to make an impact every day
- Flexible and alternative shift schedules
- Work-life balance and adequate time off
- Being part of a winning and diverse team
- Supporting socially responsible brands
- Option to use earned wage access
- Feeling valued by managers and peers
- Structured mentoring opportunities
- A clear career development plan
- The right amount of overtime
The list goes on. Everyone is different and values compensation differently. One thing we know for sure though, is that compensation alone is no longer going to satisfy employees long term.
Incoming generations especially value flexibility and work-life balance. Companies focused singularly on cash will find that there is not an amount of money they can rationally pay employees to create satisfaction without any of the above.
So, what can be done? If we dig into the list above and work on a few alternative forms of compensation, employees get a broader range of “thank you” from their employer. Not having a singular focus on cash creates a more complete level of employee satisfaction.
Management teams know their employees better than anyone, although there are always some blind spots. Starting with an anonymous survey is always a good idea, especially if you plan to take action. According to survey data from Ankura Consulting Group, over the last 24 months employees value shift schedule improvement, better communication, and overtime levels the most.
1. Shift schedules – Employees working a schedule they love will not leave for an additional dollar an hour of pay.
The shift schedule improvement is often the heaviest lift of all the categories but may drive the most significant positive results. The right shift schedules can significantly improve morale while also driving performance by having the right people in the right place at the right time. They often don’t cost more when appropriately implemented but can be costly when the right work and pay policies are overlooked. However, they directly impact days off and work hours and are an emotional topic.
2. Communication – Employees need to understand how their work impacts the organization and creates value.
Only 33% of employees who took the Ankura survey felt that the management team communicated well. This is a huge blind spot for management teams, and it ties into other priorities. Communication is a currency that ties to many other topics like feeling valued and making a difference every day. Without communication, employees are often unaware of how the work they do translates into important outcomes. Leadership teams often ask, “Will saying thank you really make a difference?” The answer is an astounding yes. Starving employees of this feedback will cause your best workers to leave, and you will be left with employees who do not care about making an impact.
3. Overtime – An incredibly useful tool.
Overtime is also a major topic as it directly translates into pay. This topic will remain sensitive as a target of cost-cutting and waste. Unfortunately, for high-growth businesses, overtime is an incredibly effective tool. Employees get extra pay, and employers can satisfy customer demand. There are generally two groups in the workforce today. The older population is looking for a lot of overtime, and the 20-40-year-old group is looking for something close to 40 hours. Companies that can create two different systems inside one organization are achieving a competitive advantage with the ability to please a broader range of workers. This is harder to manage, but when done right, leveraging the right technologies for governance, performance, and engagement improves dramatically.
In conclusion, employers need to look at a broad range of “currencies”, not just money, when approaching the modern workforce. It is not acceptable to assume we know what they want or to use past practices to try and satisfy them. The key is to engage the workforce in a real and meaningful way, understand their wants and needs, and work hard to satisfy them where possible.