Here is an excerpt from an article written by Sharon Daniels for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.
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In each of the past three months, more employees quit their jobs than were terminated, according to the US Bureau of Labor Statistics [click here]. This is good news for the economy but bad for individual businesses: when jobs become more plentiful, the first to exit are often the business’s most ambitious employees — the innovators, the risk-takers, the future leaders. The cost of replacing an employee is estimated at up to 250 percent of annual salary [click here].
An AchieveGlobal survey [click here] of 738 managers revealed that about one in four employees planned to leave their jobs within a year. A study reported in the May issue of Harvard Business Review [click here] revealed that 12% of high-potential employees were actively searching for a new job.
Why are employees walking away from their jobs, even with unemployment still hovering near 10 percent? Our studies show that the three biggest reasons are a lack of growth opportunities, dissatisfaction with compensation, and employees feeling their contributions aren’t being recognized. Growth and recognition are particularly important to younger workers, who have higher expectations of their employers than others do and are defecting in large numbers.
Regrettably, too many managers unwittingly encourage employees to walk out because they regard them as replaceable cogs in a wheel. The key to retaining valued employees is to manage them person-to-person rather than with one-size-fits-all management. Every employee marches to a different drummer; successful managers don’t make them parade in lockstep. Here are two keys for managing person-to-person:
• Personalize the position. Not everybody wants to manage people. Don’t force a brilliant solo performer to do it. Let those with bean counter personalities count the beans and let free spirits become free of boring tasks. Not everybody likes to travel. Don’t put those employees into sales or service jobs that cover large territories. Understand employees’ preferences before you create a team.
When you set up training programs, ask employees to identify the strengths they want to develop and weaknesses to shore up. Ask employees to suggest special projects they’ll find interesting; they can provide valuable ideas for the business. All this is increasingly possible as work becomes more specialized and there’s less need for can-do-everything employees.
• Personalize the rewards. Businesses are giving Christmas turkeys to employees who don’t have an oven. They’ll do much better by learning what each of their valued employees wants most and providing it. Young parents often put flextime at the top of their wants list. Many young people expect a collegial environment and lots of mentoring and encouragement [click here].
Across-the-board perks eventually become seen as entitlements, anyway. Witness what happened in April at the Carlsberg brewery in Copenhagen: It allowed the brewers unlimited beer drinking at lunch and gave each brewer two cases of free beer monthly — but when it eliminated drinking during working hours strike.
The most common reason why managers are recognition misers is lack of time, our studies show. But it takes little effort to make a commendation that has impact. Be specific with your praise: A perfunctory “You did a nice job” isn’t nearly as strong as “I want to thank you for what you did on this project because it increased output by 24 percent and our department’s number one in the company.”
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To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.
Sharon Daniels is chief executive of AchieveGlobal, which provides performance improvement consulting and solutions in leadership, sales, and customer service. With offices in 42 countries, the company offers customized learning in 30 languages and dialects. Contact Ms. Daniels at firstname.lastname@example.org.