Team KritikalhireMarch 3rd, 2023
Employers typically consider material aspects to be the driving force behind employee retention. If that is so, competitors could easily attract talent by offering something more. The post-pandemic situation has revealed that there are other factors that the employer must keep in mind for talent retention and prevent employee turnover.
The Great Resignation and a highly competitive labour market have made attracting and retaining talent a significant edge for employers. To meet it, many are following a basic strategy: "Ask people what they want and try to give it to them", says Mark Mortensen & Amy C. Edmondson in their article Rethink Your Employee Value Proposition, published in HBR.
Probably in the past, the employee would have responded by seeking higher financial benefits, but the experience now is different. While few require flexibility—notably, remote and hybrid work, others would ask for steps taken by the company toward employee well-being.
As per Bonnie Dowling, an associate partner in McKinsey's, "there's some variation. Interestingly, this fundamental shift may not be a trend; it is striking across all levels, from frontline employees to executives. It's also striking across all industries. Yes, you see higher churn in areas like retail or hospitality that historically have always had higher churn. Still, in finance or insurance organizations, you're also seeing high churn".
Across various industries and employment levels in a company, there appears to be a commonality in the change being evident Employers will have to amend and align their hiring and retention strategy to accommodate employees' renewed expectations to build a thriving and sustainable future for the organization and themselves.
Mark and Amy believe a system comprises four interrelated factors in designing and implementing an employee value proposition. These are:
Material offerings that deal with compensation, comfort, and convenience that an employee would prefer
Opportunities to develop and grow appeal to the stature and opportunity available for developing new skills that a company can offer
Connection and community are associated with being recognized, appreciated, and valued. Mutual accountability and social relationships energize an employee to express themselves candidly.
Meaning and purpose are the organization's aspirational reasons for existing Employees' desire to get satisfaction and meaning from their work.
They explain that while material offerings and connection and community are experienced in the short term, connection and community take a long time to build Growth and development, and meaning and purpose are experienced in the long term. Also, the factors are either individual or collective. Material offerings, growth, and development opportunities are given to people individually, while connection, community, and meaning and purpose are experienced collectively.
Bonnie Dowling observes that many employees have stepped out of the workforce entirely. Different types of people are looking for other things, and compensation is not the only thing they see. He adds that these people who have stepped out of the workforce cannot be ignored, as in the US, there are not enough people in the force to fill the number of job openings.
Leaders need to address the factors holistically to ensure that focusing on one doesn't undermine another, advice Mark and Amy. One employee's most significant current demands would differ from another employee's pressing needs. Executives are stepping back to identify everything their people need to thrive and produce high-quality work over time. They further add that a systemic approach is necessary to overcome this challenge, as there could be different owners for the four factors. Each of them would lead their stream in a silo, ignoring how changes in one aspect affect others. When senior executives think systemically, they naturally consider the relationships among the factors in the employee value proposition.
We will continue this in our next part, which will dwell upon the solutions to this challenge.
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