Recently, a home builder asked me to help solve his biggest organizational challenge: keeping his best employees from leaving. He was facing “super high turnover” from other builders “cherry-picking my best people” and couldn’t understand why it was happening. It didn’t take long to identify several contributing factors.
Understand Why Employees Leave
To understand why employees leave your company, it’s important to conduct exit interviews. Was it solely for more money? Did they see a better future for themselves at the other company? Were they unhappy working for your company? Why?
Encourage them to be honest (what have they got to lose?) and to be specific. Unearthing the reason (or reasons) why someone leaves is the best tool for assessing your organization and its ability to retain talent.
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Which Employees Are Most Likely to Leave
The very best employees are the ones who are most sought after, and the most likely to answer a headhunter’s call.
They’re also the people most likely to seek other opportunities if they’re unhappy in their current roles. They’re more confident, less risk-averse, and more demanding of opportunities to grow and advance. Meanwhile, “hangers-on” hang on, and are neither sought after nor self-promoting.
The company that doesn’t “nurture and feed” its top performers is left with the mediocre performers, dragging the company down with their mediocre work.
The Role of Performance Management and Feedback
The builder in question admitted that while the company did have an annual performance review process in place, many managers failed to conduct performance reviews, while others simply used them only to justify employees' annual “merit increases” in pay. In short, they failed to take seriously this very important tool to encourage, inspire, and develop key employees.
Effective performance management includes not only positive feedback (“You’re doing very well in these areas”), but also prescribes areas where improvement will help the employee to advance (“I’d like you to work on improving your communication skills ... and here’s how I’d like you to do that”). Further, a robust performance management system provides a road map to advancement. Great employees want to know what’s next for them.
What Happens if You Offer No Clear Career Path
Without a clear career path, good people will go where they can find one.
Smart builders draw a clear road map for their best and brightest team members. The “next job” for top performers is clearly communicated and plans are made for how and when advancement can occur. While working for a top 10 builder, I helped create a Career Path Development Program where “levels” were established for each job role, allowing great performers to advance from a “Level One Superintendent” to Levels Two and Three, based on specific performance metrics, skill development, and behavioral attributes.
With that advancement came more money, higher skill level, and more opportunity. It created a framework by which great employees could take ownership of their development and enjoy the rewards that came with it.
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Recognition and Reward Go a Long Way With Employees
The best employees like to know they’re appreciated. Receiving recognition for a job well done, serving as a mentor to new employees, and earning awards for exceptional performance all give a valued employee a sense of pride and achievement that is priceless—and gives them good reason to stay.
I recently talked with a construction manager who left a top 10 builder because, as he says, “I was just a number, and they gave me more responsibility without the benefits that go along with it.” Set up recognition and rewards and mentoring programs and give employees the opportunity to engage them; if those programs are legit and valued, the best employees will jump at the chance and your whole organization will benefit.
The Best Employees Always Look to Learn
Some employees are content to do the same job year in and year out. They don’t aspire, don’t seek to advance, and are comfortable in their limited roles. On the other hand, the best employees are those who seek to learn new skills that will allow them to grow, develop, and advance—and they’ll look elsewhere if their current employers don’t provide the learning opportunities that facilitate learning new things.
Smart companies include a learning plan in their performance management systems and provide the avenues and funding to enact those plans.
The best and brightest were leaving for greener pastures not for the “green," but for the opportunity to build their careers.
Belief in Your Company's Vision
Great employees want to believe in their company’s vision for the future. They want to be a part of the company’s future growth, to share the vision of its leaders, to be a part of something special and enduring. They get inspired by a compelling vision. When that vision is missing, vague, or is not expressed, the best people become discouraged.
The lack of an exciting, compelling reason to stay makes it much easier for a competitor to lure employees away, sometimes for nothing more than a pay increase. Smart companies encourage and inspire their employees by continually talking about their plans for the future, their vision for what’s next. Giving the best people a reason to stay—a reason for hope and excitement—is possibly the best way to avoid losing them.
Yes, Compensation Matters, But ...
Of course, how much a company pays its employees is important. And I’ve always subscribed to the belief that if you want the best people, you need to pay for them. I’d rather pay $20,000 more per year for a top construction manager who builds homes on time, on budget, with high quality and high customer satisfaction, than to “save” a few dollars by employing a mediocre talent. I see compensation as an investment, not a cost.
But it’s about a lot more than money.
The builder who asked for my help had already convinced himself that he was losing good people simply because his competitors were offering them more money. What we discovered was that people were leaving for other, more important reasons: because they saw no path for their future, their hard work went unappreciated, they were uncertain about the company’s future, and they weren’t being supported in their aspirations for development and growth. The best and brightest were leaving for greener pastures not for the “green," but for the opportunity to build their careers, while the hangers-on were content to do the same jobs and get their paychecks, putting the company in its downward spiral.
Want to hire and retain the best people? Give them reasons beyond a salary to see your company as a great pathway for their careers. Invest in them in ways other than money.