Lessons for both employers and employees.
I was recently talking to a colleague of mine, who is a principal at a smaller firm that provides professional services to its client base and has been around quite a while. I have come to understand that they treat their employees very well and are rightfully proud of the culture they have fostered. Historically, they have experienced very low turnover. Recently, not so much.
She told of one young man in her company who was paid competitively in the mid-$60K range. He had received an offer for a little over $100K to go work for another company. He took the offer and left. His former colleagues are still in touch with him and, sadly, he is miserable in his new role. However, he feels stuck---the pay differential is too great to consider going back to the company, culture, people, and job that he loved. As an illustration of the extent to which this is happening, a recent article suggests the Great Resignation is evolving into the Great Regret.
My colleague’s company is now doing things to minimize the chances of this continuing to happen.
As examples, they are forced-ranking their team, and really focusing on the top people they want to keep. They are institutionalizing career discussions with all employees to ensure that employees clearly see their future opportunities with the firm. And they are selectively bumping pay where appropriate.
This is a vexing problem, especially for smaller companies that don’t have the deep pockets to allow them to pay “above the market.” It is also challenging for employees who, understandably, must do what is in their (and their family’s) best interests. I have always felt that retention starts with having the right culture, but this story clearly indicates that a company must go well beyond that, and still may struggle to retain their best employees.
From the standpoint of employees, sometimes it can be all about the money. The rising cost of living forces employees into hard choices: leave the company they love to go for more money at a different firm? Have difficult discussions with managers/owners of their current firm about their prospects elsewhere, in an effort to stay with the firm they love?
The trick for employers who want to keep their best is not just to maintain a great work culture (although that’s critical) and competitive benefit packages. It’s to routinely “check in” with employees—and the competitive market—to make sure that they are compensated at least in the “ballpark” of other firms that want to poach them, and that they have a clear picture of their path to career/salary progression. Even if your salary offer is less than the competing company, your best employees might stay for a compelling value proposition that includes a great culture and a clear understanding of what their career and compensation future may hold.
For employees, the adage that the grass is not always greener on the other side of the fence may, sadly, be true. If you love where you work but are tempted by an attractive offer, don’t be bashful about talking with your manager before taking the leap. As the employer who wants to retain your top talent, the trick is to help employees see more clearly the color of the grass with your firm so the employee can make fully informed decisions when another company shows them the "green."
Greg Mickelson is a Principal of Standish Executive Search, a New England-based firm that advises business owners, executives and boards who are positioning their companies for accelerated growth, change or succession.