Recently, at an event about retaining talents, I talked to some people how to stop employees leaving for the competition.
“How to motivate people? You have to give them more money”
“But”, I responded, “there is a lot of evidence that people are only motivated for a very short time, and giving more money can even have a NEGATIVE effect on motivation. Giving more money is an outdated idea about motivating people, that is no longer valid for the more complex tasks in the 21st-century organization.
The person I was talking to explained themselves further:
“Well, in my experience, in London, companies ‘buy’ people to come and work for them by offering them a higher salary. Money is the motivator for people to move”.
With the war on talent out there, many companies face the challenge to get the best talent in tech out there to come and work for you. Not an easy endeavor, where the best tech talents can have their pick.
When talent is hard to find and it is hard to motivate people to come to work for you, the easy and quick solution is to give them an incentive in the form of a higher salary.
Although this is a tempting strategy, for the long-term it is not advisable. Employees who are looking for more money will leave as soon as they get the change, to the next one who pays a bit better.
Besides, the salaries in your industry will get higher and higher, which will affect your business, your market position, and your results.
However, if this happens in your industry, there is a risk your employees will be tempted to switch to another employer as soon as someone makes them a good offer, and this is something you want to avoid.
How to stop employees from leaving for the competition
The best answer to make sure they want to stay onboard, even when another company makes an offer they can’t refuse. Because, in the end, money is not really a motivator.
Focus your energy on creating a workplace that offers autonomy, mastery, and purpose.
If you can create a great place to work where people are free, have a great team and can work on cool stuff, they will not so easily be tempted to switch to first one that dangles a carrot in front of their nose.
This mechanism works also the other way around: if you people don’t like working for you they will not stay, no matter how much you will pay them.
According to Gallup’s 2017 State of the American Workplace report, company culture was among the top five reasons why employees leave their jobs for positions with other companies.
What kind of incentives do you need to give to stop employees from leaving?
Of course, people like to be financially secure and need to feel appreciated. To stop your employees from leaving to the competition, of course, you should pay a decent amount that reflects the work and the added value they bring to your company, and that is competitive in the industry. You can add bonuses as rewards for achieving yearly team results or even give out stocks to your employees. That will increase engagement to the long-term organizational results and make them more likely to stay on board. Make sure to offer a compensation plan that increases retention, teambuilding and a sense of making an impact.
What kind of culture will help you to stop employees leaving?
People want to make an impact. Make sure you have made your purpose and your values explicit, and live up to them. They are the glue that makes your team strong and motivated. Build a culture of high-trust, and help people to develop their personal leadership.
Offer remote working options. Make sure there is a lot of emphasis on development and team. Create an open workplace with different spaces for people to work, meet and relax. Make sure you have effective tools and policies in place and supply good devices for people to work with. Put an unlimited holiday policy in place, or bring the office to the beach for a week or two every year.
Make your company so cool people don’t want to leave for all the money in the world!
What if your employees leave after all?
If you created a great place to work and someone leaves for a financial incentive after all then, well, maybe this wasn’t the kind of employee that really had a cultural fit. Make sure, in the future hiring procedures to manage expectations, give people a good understanding of their career and development opportunities they have within your company. So review your hiring procedures to avoid “wrong hires”, and let anyone who doesn’t fit leave gracefully. It is will only help you to build a better and stronger team.