After all, if an employee just received a promotion but they aren’t satisfied with their pay, or if they didn’t get the promotion they hoped for and feel stagnant in their role — it’s only natural that they look for “greener pastures” elsewhere.
While seeking to retain every employee isn’t realistic (nor the best strategy for maximizing employee potential), it is worthwhile to focus your retention effort on those employees who are in the mission-critical roles that your organization can’t live without.
There are several ways to reduce employee turnover rate. Below are five signs you should be aware of. Along the way, we’ll also discuss what you can do to improve your chances of keeping these valuable employees within your organization.
1. Employees who are paid below market and/or below their peers
Between employees in the same position, there can be many justifiable reasons for pay differences. Each employee offers a unique combination of personality, leadership style and abilities, some of which are going to be more valuable to your organization than others. Possible (and justifiable) causes of pay differences include unique skills, education, certifications, longevity and performance.
Yet, when the pay gap is stark for employees in the same position, at the same level of performance, lower-paid employees will take notice and feel like they’re not getting a fair deal.
What to do to fix it:
You’ll want to figure out which employees are below the minimum of their salary range, as well as which employees should be moving upward within their range according to their performance, and make those adjustments.
Finding pay inequities requires the following: information about market rates for your various job positions, salary ranges based upon those market rates and compa-ratios for employees within their established, market-based salary range. A comp-ratio compares an employee’s salary to their salary range.
Once you’ve calculated the compa-ratios for each employee, you can start your equity analysis. Your first step is to identify outliers who sit below the minimum of their salary range. Then, look at everyone’s placement within their range from the perspective of performance. Keeping employees at suppressed levels could be risky for your organization from a retention and a compliance perspective. If you need more tips on how to identify and resolve internal compensation inequities within a position, check out our ebook.
2. Employees who think their pay is low
Up to 80 percent of your employees who are paid above the market are thinking that they’re paid at or below market. The fact is employees don’t always understand how their pay is determined.
PayScale surveyed 71,000 people and found that most people don’t know if they’re paid fairly or not. Notably, 80 percent of people who are paid above the market think they’re at or below market. Additionally, 64 percent of people who are paid at market believe they’re paid below market. This is a big missed opportunity — not to mention a waste of money!
It’s entirely possible that you have high-achievers who’ve just received above-average bumps in base pay — and still feel like losers in the deal. These people know that they’re valuable, and they are constantly assessing their worth in light of the market.80 percent of people who are paid above the market think they’re at or below market. Click To Tweet
What to do to fix it:
Just paying your employees well isn’t enough — the message they are paid well (and fairly) has to be clearly communicated. If you aren’t transparent about the methodology you’re using to make pay decisions, employees will not give you the benefit of the doubt.
The good news is that small changes in the way you communicate with employees about their value, your company’s strategy and compensation, can make a big difference in their satisfaction. Our research found that how people are paid relative to the market for their position matters relatively little in terms of employee satisfaction. What matters is how employees feel about the pay process, which has 5.4 times as much impact.
Want more tips and tricks for effective compensation communications? Download the ebook Everything You Need to Know About Communicating Pay.
3. Employees who just changed roles
Employees do their best work and feel most satisfied when there is perfect alignment of three elements: competency, passion and organizational goals.
If an employee recently changed roles, they may no longer be in alignment and as a result, start to look for something better suited to their skills and aspirations. For example, if you’ve promoted an individual contributor — who enjoys using her stellar analytical and quantitative skills — to manager of a team due to business needs, this person may no longer be in alignment. Perhaps she didn’t aspire to become a manager and feels stressed out by the added responsibilities. Furthermore, she needs training on how to motivate employees to be an effective manager. If useful training isn’t delivered in a timely manner, the employee may become unhappy and seek other opportunities.
A variation of a role change is a project change. An employee may have put a lot of energy into one big project. But now that the project is complete and she’s been assigned to a new project — which doesn’t fully utilize her unique skill set or align to her career goals — she may struggle to care about her job as much as she used to.
What to do to fix it:
Employees who recently stepped into new roles need extra support to fully ramp up. Make sure these employees are getting the resources and training they need to be successful.
Oftentimes, an employee becomes disengaged because they don’t see how their individual contributions are rolling up to organizational goals. Or they may perceive that a new assignment or role is taking them further away from achieving their career goals. Managers should work closely with newly transitioned employees to determine what success looks like in the new role, help them connect the dots on how the role fits into organizational objectives, and set clear goals to help the employee gain momentum. Additionally, if you create a culture where open, honest communications and risk-taking are encouraged, employees will feel safe asking for the help they need.
4. Major Life Change
When something big occurs an employee’s life, it often causes a change in attitude about her job. Such events can include childbirth, marriage, divorce, a sudden (and/or serious) illness, or the loss of a loved one. If something big happens in an employee’s life, and they feel like their job doesn’t allow them the space to take care of themselves, they will consider leaving the organization.
What to do to fix it:
You will always have some talented employees who choose to leave your organization for personal reasons. Retaining all of these employees isn’t possible, yet, you can help your employees feel cared for by enacting policies that demonstrate that your organization values about work-life balance. For example, by allowing flex work arrangements, remote work, unlimited personal time off (PTO), you are showing employees that you respect them as human beings and they’re allowed to take time off to recharge or take care of their families.
5. Employees who are stuck
If an employee is already fully proficient in their current role, but isn’t getting opportunities to uplevel their skill set and take on greater responsibilities, they will feel stuck and start looking for new opportunities. Do you have employees who have been doing the same job for years?
PayScale research found that if employees perceive a lack of learning and development opportunities within their current workplace, they are more likely to leave.
What to do to fix it:
If you find multiple employees who have been doing the same job for years and years, there may be a problem with your career-pathing model or organizational structure. In the short term, you may consider giving these employees new assignments, projects and recognizing them for their contributions. In the long term, you’ll want to evaluate your organizational structure for career progression opportunities, or create new options for progressions such as cross-functional assignments or international moves. You may even want to go through a job evaluation exercise to ensure you’re creating adequate growth opportunities within all your positions.
Say “Thank you” to Your Employees
One last thing you can do — not only to address flight risks, but to make all employees happier — is to show them your appreciation.
In 2017, we conducted new research into employee engagement and found that appreciation is the primary driver of employee satisfaction. Our study also found that appreciation makes a huge impact on reducing attribution. In fact, an employee who strongly disagreed with the statement “I feel appreciated at work” is 2.1 times more likely to leave as the neutral employee.An employee who doesn't feel appreciated is 2.1 times more likely to leave.Click To Tweet
What’s important to know is that appreciation is not about monetary reward. It’s about acknowledgement of great performance. Recognition can and should happen in many directions, from peer to peer, from manager to peer and from peer to manager. It’s an incredibly low-cost way to keep your best people around.
The key things to remember when giving recognition are:
- Recognize frequently
- Be specific and call out the contributions made by the individual employee
- Encourage peer-to-peer recognition
- Recognize employees when they act in a manner that’s consistent with your core values
Tell Us What You Think
How do you handle employees with high flight risk potential? We want to hear from you. Share your thoughts in the comments.