Many entrepreneurs are focusing on employee retention during the economic downturn. Here are 4 reasons employees stay beyond the salary.
- The US' booming labor market can increase competition among employers to retain staff.
- Founders wary of a recession are focusing on financial and nonfinancial ways to keep their staff.
- An expert says workers can be motivated to stay by purpose, autonomy, competence, and togetherness.
If you have a Spotify account, it probably looks different from your friends' accounts: You have your own playlists, favorite songs, and musicians you follow. Similarly, if you run a startup, yours should give each employee a personalized experience based on what they value most at work, said Stephan Meier, a business-strategy professor at Columbia Business School.
"Employees are the new customers," Meier, a behavioral economist who studies what motivates people to work beyond money, told Insider. "There are huge differences in what people actually want."
The US is in a booming labor market, which can increase competition among employers to keep their staff. Many business owners wary of increased costs and the risk of a recession are looking at ways to increase the likelihood their employees will stay with them. Meier said that if companies want to retain employees, they should get their feedback, just as they would survey their customers.
"All of those tools that we have in customer centricity apply to employees," he said. "Figure out what actually matters to them."
Meier said his research suggests there are four main motivations that keep employees at a company: purpose, autonomy, competence, and togetherness. Here’s how to factor these values into your company’s culture, policies, and benefits to help retain staff in an economic downturn.
Ask your employees what they want
Before you implement any changes, understand what your employees value.
Ryan Stana, the founder and CEO of RWS Entertainment Group, which provides staffing and services for theme parks, cruises, and theaters, said that when he asked his employees what kept them happy, they told him respect is one of the most important factors.
"Employees will leave for another company if they feel that they will be taken more seriously there," he said. "We really focus on analyzing our exit interviews, looking at commonalities about why people are exiting, and consistently seeking ways to improve and evolve."
While exit interviews are an effective way to understand why employees leave, so-called stay interviews can help you implement change before it's too late.
"Organizations are finding those to be much better than exit interviews because you can act on them," said Maurice Cayer, a human-resources professor at the University of New Haven and an industrial and organizational psychologist.
For these interviews, he recommends identifying employees you would regret losing and asking them what would get them to stay longer. He said that while sometimes they might say more money, often they'll identify nonfinancial factors like feeling more respected or gaining more responsibility.
Remind employees of the purpose of their work
In general, Meier said, employees want to feel a sense of value from their work. He gave one example of a doctor working on a patient's knee who sees it only as a body part to fix. The doctor can become jaded and lose the significance of their job, but if their manager trains them to remember all the things the patient can do with their knee, like play soccer, the doctor is more likely to realize the importance of their work.
Another way to help employees feel a sense of purpose is to ensure that the tasks they're doing are engaging. "People want challenging, meaningful work," Cayer said. "Many times they're not given it; their jobs have been engineered to be efficient but not engaging."
Build an environment of autonomy and trust
Meier said employees also want autonomy, which is primarily established through trust between managers and staff.
"A lot of managers and employers don't trust their employees as much as they should," he said. Some companies have implemented surveillance technology to monitor employees working remotely; Meier said he believes that isn't the right way to go.
Stana said he learned that RWS's employees needed flexibility, so he implemented a policy that gives employees the option to work fully remotely, go into the office daily, or create a hybrid schedule, depending on their role.
He said that introducing remote and hybrid scheduling "has helped make our employees' lives much more manageable," adding, "Employees have proven that they can handle the flexibility and shown us that it's actually more productive to be at home."
Meier said that while workers want flexibility, a big motivation to go into the office is the ability to interact with other people. "If you feel part of a larger group where people really support each other, that's very motivating," he said.
Provide opportunities for career advancement and development
There's a fine balance between work that challenges employees but doesn't require so much from them that it leads to burnout. Meier encouraged employers to help their employees feel both competent and challenged.
Stana said that finding that equilibrium can lead to employment advancement, another valuable component in keeping staff happy.
Stana said that at RWS, many seasonal performers can advance their careers by working across the company's subsidiaries, adding that some staff started working on cruise ships and ended up in Broadway shows. "There's a wide range of what we do, so it allows our employees to see their trajectory to grow," he said.
Cayer said that on top of career advancement, employees want opportunities to learn on the job. "Training can have a big payback," he said. "People love to work for an employer who helps them develop."
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