If you’re concerned about being able to keep your best employees on board in this economy, you are not alone. In a robust job market where it’s become common for employees to jump ship for a higher paycheck, savvy employers are keeping a closer eye on flight-risk employees and trying a host of tactics to retain them.
While there’s a variety of retention tactics you can implement, I think it’s helpful to have a working theory on what drives employee satisfaction and what causes discontent. Recently, I read a TLNT article by Mercey Ehrler and learned about the job embeddedness theory.
Unlike other simple measures of employee satisfaction (like the eNPS score), the job embeddedness theory provides a holistic means of identifying and addressing issues that may lead to turnover. Below, I’ll discuss what the theory is and how you can use this concept to hold onto your best people.
What is job embeddedness?
The theory of job embeddedness was developed over more than a decade of research conducted by Georgetown University’s Brooks C. Holtom and his colleagues.Their research (“Increasing human and social capital by applying job embeddedness theory,” published in Organizational Dynamics in 2006) explored various elements leading to employee retention or turnover, and presented a range of concepts and potential applications that HR teams may find useful.
Mercy Ehrler at TLNT provides a useful summary of Holtom’s research. As she noted in her article:
Holtom asserts that employees can be viewed as individuals with a series of connections among different aspects of their lives. Those whose lives integrate more roles, responsibilities, and relationships have more connections and thus can be described as more embedded.
Specifically, individuals who are involved in a wider range of work-related roles, responsibilities, and relationships are more ‘job embedded’. In contrast, individuals who have maintain fewer roles, have less responsibilities and fewer close relationships at work (or see and talk to co-workers less) are less ‘job embedded’.
THE KEY ELEMENTS OF JOB EMBEDDEDNESS
Job embeddedness theory identifies three elements that determine how connected someone feels to their organization. They are:
Is this individual doing work that they believe in? Does this individual feel like their contributions matter to the organization? Is the individual working on projects that helps her reach her goals? Working on things they are good at?
Is this individual well connected to other people and initiatives in the organization? Does the individual have friends? Good relationships with her management team?
Sacrifice is the level of disruption an individual would experience if they were to quit their job. Disruption can be multi-faceted: aside from the obvious benefits of employment such as income and insurance, there are other incentives that the employee may not want to lose. These could include things like stock options, opportunities for future advancement, friendships with coworkers and the reputation they’ve worked so hard to build.
To increase employees’ commitment to your workplace, you’ll want to invest in activities that help employees increase their affinity for their day-to-day work (“fit”) and those that enable employees to build more and deeper connections (“links”). By moving in this direction, you can bring employees into a closer orbit around your organization. When employees are more “plugged in,” they would feel they need to make a greater sacrifice if they were to move on from your organization.
How to apply job embeddedness theory to improve retention
Here are five practical applications of the theory that can help you increase job embeddedness and employee satisfaction.
1. Foster an Environment Where Coworkers Can Become Friends
When employees feel like they are part of a great team, their satisfaction increases. Friendships at work are important. Research from Gallup has repeatedly shown a concrete link between having a best friend at work and the amount of effort employees expend in their job. Even beyond that, employees today increasingly expect their job to be more than a paycheck. People seek out organizations that have stellar workplace cultures.
Yet, new research from Future Workplace and Virgin Pulse reveals that 39 percent of employees feel lonely at work (HBR coverage). This research into connectivity in the workplace uses survey data from more than 2,000 managers and employees from 10 countries. Dan Schawbel, CEO of Future Workplace, also found that a third of employees globally work remote always or very often, and they are more disengaged and more likely to quit. Only five percent always or very often see themselves working at their company for their entire career, compared to a third that never work remotely.
Fostering an environment where employees can bond with each other comes down to several elements:
- Making sure technology is used to bridge human connections rather than remove human connections.
- Creating occasions for people to hang out
- Designing thoughtful workspaces and common spaces to facilitate interactions
- Being smart about remote and flexible work policies
Based on interviews Dan conducted as part of his research on workplace connections, he found that employees are becoming increasingly isolated from coworkers because they rely heavily on digital communication tools (emails, chat) and more workers are working remotely on a regular basis.
If you give workers a lot of flexibility, it’s important to weigh the benefits and the drawbacks. As Dan reported in his HBR piece, “multiple companies are simultaneously rolling back their remote work programs and forcing their employees to be at the office everyday. Companies that have already mandated this include Yahoo!, Best Buy, HP, Reddit, IBM, and Honeywell. They agree that in-person collaboration fosters teamwork, idea-sharing and quicker decision making. They believe it’s the best way build a strong culture, improve relationships and engagement.”
If you have remote employees, it’s critically important that you find ways to connect them with your in-office employees. For example, be clear to all employees that remote team members need to be included in making decisions (rather than letting decisions be made in hallway conversations).
You can make your culture more collaborative through good workspace design. Being intentional about how you organize the workplaces, break rooms and snack areas can go a long way. You can set up common facilities (snacks and coffee) in a central hub so that people are forced to visit that location where they might bump into coworkers and have conversations.
As PayScale’s Employee Experience Manager, Jacqueline Vonk, says, “It’s important to design and nurture physical and operational environments that nurture employees and their relationships, and brings [the] company culture to life.”
Activities Don’t Need to Be HR-Led
You can also encourage your employees to form groups and plan events on their own and make it clear that HR is available to support them (e.g. providing budget or logistics assistance). This is one of our People team’s favorite tactics at PayScale. After noticing that a group of employees had turned our Seattle office basement into a makeshift gym because they want work out together, our People team decided to support them and all employees by building a more robust gym in our office.
Other initiatives PayScale employees have started include a running club, cycling to raise money for cancer, and planning a happy hour to celebrate Hispanic Heritage Month.
The key to our success is that our management and executives actively endorse and participate in these activities — sending the signal to employees that it is accepted to take moments out of their day to gather and socialize with one another.
2. Train Your Managers to Be Coaches
While there are many leadership skills and competencies that matter for managers, coaching is central to improving the performance of a team. This goes back to the first element of job-embeddedness theory: employees are more satisfied when they have clear objectives and are good at their jobs. With coaching, employees can improve their performance and job satisfaction. As an HR professional, it’s your role to help managers develop the skills to become effective coaches for employees.
According to BizLibrary, a leader in online learning and employee training software, there are six key skills and competencies that play a role in choosing a method of coaching for employees, including:
- Asking good questions
- Taking a positive approach
- Listen and empower (and showing genuine care and concern for the employee)
- Emotional intelligence (helps you figure out how to guide a conversation)
- Commitment to continuous learning
- Coaching in the moment
3. Foster an Environment of Psychological Safety
Creating an environment where it’s psychologically safe for team members to be themselves, speak up and take calculated risks is critical to the performance of a team and the innovation of the business. When managers fail at creating psychological safety, it leads to increased dissatisfaction and turnover.
Amy Edmondson, a professor at Harvard Business School, coined the term “psychological safety” in 1999 when she was in grad school studying medical school teams. The goal of her research: find out what distinguished the best performing teams. She found that the best teams aren’t the ones with the smartest or most experienced individuals; instead, they are teams where people are comfortable being and expressing themselves.
Edmondson explains that as humans, we’re hardwired to be worried about the impression we make on other people. We want people to like us, so we hold back sharing our ideas that might make us look “stupid” or lose credibility. But this is problematic in the workplace because when team members are afraid of speaking up, of taking risks because they think the benefits aren’t worth the risks, that adds up to a lot of missed opportunities to innovate, learn and grow.
Edmondson found that on a team where psychological safety is present, team members can have difficult conversations, express their honest opinion, take calculated risks for the sake of the potential rewards and collaborate to build relationships on a human level.
To help your managers and leaders create a culture where it’s safe for employees to speak up, try out these ideas:
- Remind them of the benefits of promoting difficult conversations and healthy conflict
- Help your managers develop emotional intelligence, so that they are aware of how they act and how their behavior affects their team
- Talk to them about the benefits of admitting mistakes; ask managers to incorporate this into their language (e.g. “If this initiative succeeds” )
- Promote questioning and curiosity — managers should emphasize that everybody’s input matters and that it’s okay to challenge authority as long as it’s done in a respectful manner. Secondly, encourage managers to brainstorm solutions with their team so that everyone gets a chance to contribute.
- Educate managers on what it means to be an inclusive leader — emphasize that it’s important to embrace different personalities and create a space where everyone feel free to be themselves. Additionally, encourage your managers to get to know their employees as people, not just workers.
4. Set Clear Expectations
If an employee does not know what is expected of them, or if they’re unsure they are working on the right things, how can they possibly be engaged?
Gallup has studied the various elements of employee engagement for years, and the research suggests that setting clear expectations may be the most foundational element. They found that this desire for clear expectations is a shared need across generations and career stages. For example, Gallup finds that 72 percent of millennials who strongly agree that their manager helps them establish performance goals are engaged. And across all generations, individuals who strongly agree that their manager helps them set performance goals are nearly eight times more likely to be engaged than if they strongly disagree with the statement.
Gallup shares these best practices for establishing expectations:
- Developing role expectations with worker input, so that workers own their expectations and succeed
- Articulated clearly
- Aimed at excellence
- Individualized to what each person is good at
5. Increase Transparency
Trust in management and in the future of the company is a key component of employee engagement. When employees have visibility into your organization’s goals, plans, strategies, financial performance and challenges, they are more likely to trust the leaders of the organization to set the right course and lead the company to success (Quantum Workplace 2015 Employment Trend Report).
When you share information that’s traditionally reserved for management with employees, you prevent your team from wondering “why are we doing this” or waking up surprised by a new policy that feels arbitrary. Additionally, by being clear on where the company is going, how it’s performing and what you’re planning next, it lets employees know that you respect and value them.
What I’ve found though, is that organizations may be comfortable sharing business information with employees, but they aren’t nearly as comfortable sharing compensation information with employees. However, research shows that sharing your compensation philosophy and pay process with employees can yield huge dividends in increasing their satisfaction with their pay and their commitment to their employer. Of course, what you share should be tailored to your culture and your particular employee population.
To start, I encourage you to share your compensation philosophy with employees. This is your high level point-of-view on how you view compensation and how it relates to your corporate values and business strategy. It’s important to tell employees how you define your talent market, what your company has chosen to reward and how pay ranges are determined (e.g. “We really value skills X and Y and we’ve priced this job based on the market value of these skills”). Also, if you offer incentive pay to employees, make it clear how incentive pay is determined, who is eligible, and how the reward promotes with values or behaviors your organization cares about.
To take it even further, consider sharing with employees the pay range for their position, and let them know what they can do to increase their pay. When you do this, you’re paving the way for managers and employees to have fruitful conversations about career development as well.
[Related: learn more about how to set the right level of pay transparency for your organization ]
If you don’t have a formal compensation strategy yet, PayScale has resources to help you get started. A useful resource is the 7-Day Compensation Planning E-course, this email course walks you through the key steps of creating a compensation plan. Or, check out the guide 5 Easy Steps to a Smart Compensation Plan.
Watch out for signs that an employee is drifting away
Keep in mind that all employees and human beings are on a journey or adventure. As on any journey, there are times when you are having fun and times when you’re tired, frustrated or prefer to go home. In an employee’s journey within your company, there are certain critical moments when they may drift away from your orbit unless you take actions to help them re-engage.
When an employee becomes distant or starts to drift away, there are signs you can watch out for. Employees are more likely to drift away after certain milestones, life events or work-related disruptions, as these moments often cause people to reflect and shift their priorities.
These are some moments in the employee journey to be aware of:
- After a promotion or a role change
- A change in supervisor or manager
- The departure of a teammate they like and respect
- After the completion of a major project
- New year
- Marriage, divorce, childbirth, passing of a family member
Besides these milestones, it’s also important to be aware that certain employees may be at risk of leaving because they are stagnating in their role. PayScale research found that if employees perceive a lack of learning and development opportunities within their current workplace, they are more likely to leave.
Last but least, it’s important to ensure that employees are compensated fairly for their work and rewarded when they get good results. If you have a compensation management platform like PayScale Insight Lab, you’ll have access to reports that show you which employees may be at risk of leaving due to compensation issues. For example, employees who’ve been with your organization for a while and who are paid below market and/or below their peers may be at risk of leaving. For more tips on how to spot flight risk employees and resolve pay inequities, check out this blog post.
Tell Us What You Think
Do you have best practices on how to improve retention? Share them with us below.