Best Retention Strategy

download-10It doesn’t always take attractive benefits or a high salary to keep employees satisfied. Instead, bosses simply need to remember to say, “thank you.”

In a recent report by Appirio, 60 percent of surveyed workers said they put the most value on being appreciated by management, and that appreciation plays a big role in employee satisfaction and retention.

“Our survey found that appreciation, connectedness and emotional safety all outrank compensation as important factors in career decision-making,” Harry West, vice president of services and product management at Appirio, said in a statement. “Employee engagement can’t be solved by simply showering workers with raises and bonuses. Companies must be dedicated to providing transparency, support and technologies that keep high-end tech talent happy.”

Satisfaction isn’t necessarily directly correlated with compensation.According to the survey, employees have issues with leaders who make no effort to form relationships with their workers or show appreciation for employees. Respondents said the worst qualities a boss or manager can have are being emotionally distant and uncommunicative. Some examples are failing to give credit to workers (32 percent of respondents), rarely giving praise or expressing support (28 percent), failing to help employees with promotion (24 percent), and viewing workers as replaceable (13 percent).

Interviewees care most about feeling appreciated by their bosses. When considering a job offer, 60 percent of respondents said that feeling appreciated by their managers is the most important factor. On the other hand, only 5 percent said they were most concerned with climbing the corporate ladder, and only 4 percent said they cared most about raises.

Most workers value a human expression for a job well done. Appirio found that 55 percent of respondents said they’d feel most disappointed if a manager never thanked the employee for a job well done on a big project. Support and gratitude seem to be more motivating and cherished than any other form of reward, West said.

“The human touch is becoming even more important in a world where people spend so much time in the digital space,” he added.

So how do you express your gratitude in an effective way? Timing is everything, West said.

“One of the main ways a manager can show appreciation is by providing … a ‘thank you’ that is delivered in real time, not just at the end of the year or in a formal review session,” he said. “Consistent, verbal feedback is a key motivator for the current workforce.”

Appirio’s results were based on 657 total respondents using an online survey on the SnapApp platform.

Learning about Performance Giants

There is a complex web of subtle and often hidden learning and performance challenges that affects everyone’s workday. Regardless of title or tenure, no one is immune to the barriers it puts up between you and your coworkers and between you and your goals. And there are no shortcuts to navigating your way safely through it. However, your capacity to recognize these challenges and take deliberate steps to manage them can create a distinctive competitive advantage.

I call these challenges the hidden curriculum of work because it is this unspoken, unwritten work that doesn’t show up in your job description, yet determines your ability to stand out. Learning to navigate it is a business imperative with significant untapped human-capital potential. And just like any other form of capital — social, political, financial — a leader can either squander it or leverage it.

Leaders should think of these challenges as sleeping giants because they represent big opportunities to learn and grow, but are hidden in plain sight. Indeed, these sleeping giants make up a large part of your company’s untapped learning and performance capital. If you want your people to get smarter and faster and elevate bottom-line results, you need to wake these giants and face them head-on.

For example, as a leader you rely on accurate, real-time updates and you don’t like surprises, especially when the news is not good. However, it is precisely when the news is bad that effective communication often declines. If your corporate culture is such that leaders unconsciously “blame the messenger,” people become reluctant to deliver bad news. This Mum effect — a term coined by psychologists Sidney Rosen and Abraham Tesser — means that people distance themselves from bad news out of fear they will be blamed by association. When this happens, critical issues get buried and disingenuous interactions overtake transparent exchanges. The sleeping giant here is the chance to examine how your corporate culture treats transparency. Although truth-telling may be an expected norm for your team, it’s probably not happening as often as you’d like.

Box Retailers For Small Business

Big box retailers are getting smaller. Some are being compelled to do so by the market: Circuit City and Sports Authority liquidated. Others are shutting down less-trafficked locations. And some are doing so by design. Literally.

Take Target. In 2014, it launched a beta version of a smaller store with far fewer offerings in its hometown of Minneapolis. As significant as the new format is the fact that when these stores began to roll out elsewhere, they shifted the retailer’s geographic and product focus away from the traditional suburbs and toward cities and college towns.

In an age of e-commerce and muted spending, Target, like many retailers across the U.S., is trying find a way to reverse declining foot traffic and revenue. U.S. retailers saw low sales growth in 2015, the slowest since a 2009 decline, and so far overall retail sales are up only 2.9 percent in 2016 (pdf). This, despite falling gas prices and an improving economy and jobs market, which, theoretically, should spur higher spending. Indeed, Target reported a drop in same-store-sales, a closely watched gauge of retailer performance, in its third quarter and lowered earnings expectations for the full year.

While Target is taking some of the usual steps such as cutting prices andbringing in new executives, the company is notably doubling down on mini-Targets. The plan is for the upscale downscale retailer to continue to roll out small shops in college towns and urban centers, which feature what it calls “curated” products (read: a lot less shelf space means room for only stuff that appeals to millennials, such as dorm-room and apartment-sized home goods and fast fashion). For example this fall, Target opened a mini store in State College, Pa., with pantry items geared toward how students eat and Penn State merchandise, and another in Cupertino, Calif., featuring fresh grab-and-go food choices for commuters’ lunches and tech gear.

Target’s large stores, which carry a huge range of goods and groceries, can be about 175,000 square feet. But the smaller stores are a fraction of that size, at around 20,000 to 50,000 square feet. Fewer square feet means fewer employees to pay, lower rents, smaller energy bills, all while still selling goods at the same cost as in its traditional big boxes and instilling brand loyalty in the next generation of consumers.

An old newsroom adage holds that when something happens three times it’s a trend. And there is definitely a trend of really big retailers going small.

As we’ve noted, Whole Foods is opening a chain of lower-priced natural-foods stores in hopes of luring price-conscious and millennial customers who may be tempted to trade down. The company’s 365 by Whole Foods stores are going into hip neighborhoods like Los Angeles’s Silver Lake as well as affluent suburbs such as Lake Oswego, Ore., outside of Portland.

Much like the new Target stores, the 365 markets differ significantly from the typical Whole Foods superstore. They have a smaller layout, employ fewer people, use more technology, and stock a smaller selection. But they offer lower prices. And the problem with that is Whole Foods risks 365 cannibalizing sales from the mother ship.

Chips Away at Capital

The narratives that influence our economy have a great deal of momentum. Giant, irreversible, tectonic shifts are transforming the landscape: urbanization, globalization, information technology, the decline of print media, mobile technology, workers losing ground against companies. The momentum behind them seems so vast and powerful that a change of course is unlikely.

But fatalism isn’t a substitute for analysis. And even the biggest and most-enduring trends can reverse, or get, um, disrupted. And we may be finally seeing that when it comes to corporate profits and wages.

The salient feature of the U.S. expansion, which began in July 2009, was that the fruits of growth have been unevenly distributed between capital and labor, between companies and employees. After the financial crisis, companies moved swiftly and relentlessly to reduce labor costs, find new markets, and improve productivity. And so profits bounced back impressively.

On an economy-wide basis, after-tax corporate profits grew from an annualized rate of US$671 billion in the third quarter of 2008 to $1.77 trillion in the fourth quarter of 2014. (The data can be seen here.) That’s significant, especially when you consider that corporate profits more than doubled in six years as the economy grew slowly.

Profits rose in part because companies were both effective and ruthless when it came to holding down labor costs. Thanks to a host of big, long-standing trends — the decline of labor unions, slack in the labor markets, the threat of outsourcing — a smaller percentage of company revenues was paid out as wages, leaving a larger share as profits. And so after-tax corporate profits rose from about 4.6 percent of gross domestic product in the third quarter of 2008 to about 10 percent of GDP in 2014. (The data can be seen here.) In many quarters during this expansion, that proportion has reached record highs. Meanwhile, median income in the U.S. in 2014 wasbelow its 2008 level.

This trend — higher corporate profits and lower worker income — too, seemed unstoppable. Until recently. And that’s because political, social, and economic factors are now beginning to exert force in the opposite direction.

Unions certainly have not seen any significant resurgence. (Only 6.7 percent of private-sector workers are unionized, according to the Bureau of Labor Statistics.) But workers have benefited from other forms of pressure on employers. Although the federal minimum wage hasn’t budged since 2009, several large states and cities have passed laws in the last few years that have mandated higher hourly pay. Many large companies, including Aetna andWalmart, sensing the social and political pressure for higher wages, have imposed higher minimum wages themselves.

At the same time, there has been a slow-building but significant shift in the labor market. The U.S. economy is now in the midst of its longest stretch of job growth in modern economic history. It has added payroll jobs for 71 straight months, and has added nearly 15 million jobs since February 2010. Meanwhile, companies say they want to hire many more workers. As we’ve noted, the number of job openings in the U.S. has soared; at the end of July, there were more than 5.6 million vacant positions to be filled.

That means it has become a real challenge for companies to retain existing workers and hire new ones — employers today have to offer people higher salaries to walk across the field, or to come off the sidelines. And if they have to boost pay to fill open positions, they may find themselves having to increase pay for the people who already work there. To a large degree, the laws of supply and demand, which worked in companies’ favor between 2009 and 2014, is now working against them.

Modern Workers Are Always Looking for

Don’t be so sure that your employees aren’t getting ready to jump ship. A new study from ManpowerGroup Solutionsrevealed that 37 percent of workers around the globe, and 41 percent of U.S. workers, are “continuous candidates” who are always looking for their next job opportunity.

Knowing that many employees aren’t fully committed to their organizations, employers have more pressure than ever to improve their retention efforts if they want to keep their turnover to a minimum, according to the authors of the new research.

“In organizations where employers are not meeting their candidates’ expectations or aspirations for advancement, that is where individuals will be more likely to always be looking out for their next opportunity,” Kate Donovan, senior vice president of ManpowerGroup Solutions and global recruitment outsource processing president, said in a statement.

The research attributes continuous candidates to three main factors:

  1. New ways of working. The growth of the gig economy and on-demand jobs, like those with Uber and TaskRabbit, are changing the way people work and the types of jobs they look for.
  2. Increase in contract work. Technology firms have spurred an increase in contract work. Because they are constantly looking for employees with different skill sets, using contract employees allows them to quickly change with the times when one skill set becomes obsolete.
  3. Job loss. The recent recession, and the layoffs that ensued, was a clear sign to all employees that job security in today’s environment is not guaranteed.

Perhaps not surprisingly, the study found that job happiness is one key factor in whether people are continuously looking for a new job; continuous candidates are twice as likely as other employees to express dissatisfaction in their current role. In addition, they are almost four times as likely to believe that the best way to advance their career is by changing jobs frequently, and twice as likely to think changing jobs is the best way to increase their compensation.

Continuous candidates don’t just say they are looking for a new job; they are actively seeking them out. The research found that 29 percent of continuous candidates have applied to three to nine jobs in the past six months, compared to just 11 percent of non-continuous candidates. Additionally, 12 percent applied to more than 15 jobs during the previous six months, which is almost three times as many as their non-continuous counterparts, according to the study.

The research also found that continuous candidates are familiar with a range of interviewing techniques, including nontraditional methods and technologies such as videoconferencing.

“It is hypothesized that because these candidates are applying to more jobs more frequently, they are potentially exposed to a wider variety of interview formats and thus become more comfortable with them,” the study’s authors wrote.

So why are these continuous candidates always looking for their next opportunity? The survey found that money is the biggest reason: Of those surveyed, 33 percent said compensation was the biggest motivation behind searching for a new job. Other popular reasons included looking for an opportunity for advancement, a new type of work and better benefits.

ManpowerGroup Solutions offered nine tips to help employers retain existing talent and better screen for prospective employees in today’s world of continuous candidates:

Clearly explain how to move up. It is critical that hiring managers clearly outline to job candidates that there are opportunities for advancement. It is important to proactively offer this information, instead of waiting for them to ask.

Follow through on what you outline. You can’t just lay out a plan for advancement and never take action on it. Employers must create an employment experience that authentically mirrors their advancement messaging.

Highlight those who have advanced. Showing employees that moving up the ranks is possible is a good way to demonstrate that you are doing what you say in terms of advancement. Stories about these rising employees should be communicated internally to existing employees and externally to talent communities.

Don’t limit advancement to promotions. Many of today workers’ definitions of advancement are different from those of previous generations. Employers should open up their definition of advancement to include expanded roles, job variety, higher profile projects, and projects that involve giving back to the community or society.

Offer opportunities to learn. Employees are always looking for ways to adapt their skills so that they remain valuable to organizations. Employers can foster this opportunity by providing or reimbursing for professional development opportunities, internal and external training, or advanced degree programs.

Provide mentorship programs. Having a successful mentor within the organization is a great way to strengthen the bond between employees and their employers. Many younger workers identify the position they want and then network with the employee currently in that role. Instead of worrying that these workers may take their job one day, managers should offer opportunities for them to learn.

Build a talent community. Because many employees are looking for new jobs, make sure they consider you as a potential landing spot. Whether it is on social media, career sites or the company website, provide opportunities for candidates to receive job alerts.

Create a positive candidate experience. Employers often receive a number of resumes from job candidates who are underqualified for the open position. It is important to clearly communicate why they weren’t a fit for the job in order to avoid creating a negative perception among applicants about your organization.

Don’t look down on continuous candidates. Hiring managers need to understand that job-hopping is becoming more common and that they shouldn’t discount candidates because of it. To properly assess a candidate, hiring managers must dig deep into the reasons for this type of behavior. Candidates who moved jobs frequently may reflect a desire for geographic mobility or a lack of advancement opportunity, not poor job performance or disloyalty.