As long as I have worked in compensation, it has been said “no one is paid what they think they are worth.” Baloney. As long as I have been able to provide a business case for Associa’s competitive pay practices, that statement is justifiably ignored. While pay continues to be a primary reason why people leave their companies, learning and development is rising in importance. In PayScale’s 2016 Compensation Best Practices Report, 58 percent of companies planned on increasing their learning and development investments in the coming year.
So yes, people often do leave due to lack of opportunity. At a basic level, that lack is often translated to individual pay. Investing in employees is most organizations’ largest ongoing investment by far, but creating opportunity through learning and development is where many can fall short.
“I’m grateful for this opportunity.” A statement that every new hire says in any level of the company. But you know where else that exact statement is found? Resignation letters.“I’m grateful for this opportunity.” Statement by new hires - also in resignation letters. Click To Tweet
Think about the difference in perspectives for both new hires and exiting employees. One of them sees a vision for their new career. These new employees are thinking about how they see themselves in the organization now, tomorrow, and in the future. The possibilities feel endless, and their enthusiasm is contagious. What encompasses this vision – is it pay? Certainly that’s part of it. But they also are excited about growth, development and a promising career path. Few recruiters will sell a position without helping paint this vision of a career-centric journey for a prospective candidate.
But what about the ones leaving the company? They no longer see themselves growing and developing in their role. As a matter of fact, instead of looking to the future, they have typically spent a lot of time focusing on the past and have determined that the “opportunity” they once had has now diminished.
A common knee-jerk approach is to throw money at the employee in the form of a retention bonus, a promotion, or the promise of a one-time adjustment (my personal favorite). There is very little evidence that these reactionary pay practices earn companies anything more than a little time. As a matter of fact, there is an indication that people are as likely to leave due to poor management as for pay. They want an actual answer to the “where can I go from here?” question that lingers during every painful minute of a performance review.
Most employees (at least the ones that leave) desire movement – whether it be upwards, diagonal, or even sideways, movement in many employees’ careers means progression, development and even pay – all summed up under the umbrella of opportunity.
Next week, I’ll explore ways to engage and retain employees through opportunity. Leave a comment about how you’ve created development plans for employees in your organization.