After working a few starter jobs, I ended up in the finance department of an international industrial services company. Once I’d worked on several projects for the CEO with good results and had shown the ability to figure things out — even when I didn’t know a lot about the topic going into the project — the CEO summoned me to his office.
Pointblank, he asked me what I thought were the three biggest issues facing the company. I said that was easy. First, the backbone of our organization was our senior technicians, and we were losing them faster than we could replace them. Second, we weren’t recruiting successfully because we had high turnover and everybody knew it. And third, because of our high turnover and our inability to recruit, our skills gap was spiraling. With the organization trending toward failure, we knew we had to do something, and we had to do it fast!
The CEO asked me to “look into it.” I reminded him that I was a finance guy, not human resources. He replied, “That might be a good thing.”
My charge was to fix the issues I’d identified. I felt like David going into the valley to meet Goliath — the problems were overwhelming. In view of the challenge before us, my quest began by talking to people to get their take on what we were facing.
The first obstacle I encountered was some version of the following statement: “A 40 percent employee turnover is average for our industry — that’s just the way it is.” They were already resigned to accepting high churn as the status quo.
Consistently I ran into the same attitudes:
- A belief that money is always the root cause
- Resigned defeat hidden behind a no effort goal
- A focus on symptoms instead of root causes
- Cookie cutter solutions versus organizationally specific ones
These thought processes betrayed their opinions that failure was predetermined.
Essentially, compensation is the foundation of an employer-employee relationship. However, this conversation has to be handled up front and with transparency, and, when it is, you can then build from there. As with Maslow’s hierarchy, once that need is resolved, you then move on to everything else.
Innumerable studies have indicated that employees consistently want:
- Shared goals and values
- Integrity
- Respect
- Communication
- Transparency
- Employee growth opportunities
- Positive environment
Take the first need: shared goals and values. Employees want the same thing you want! They want to know that what they do contributes toward the organizational goal. Really good employees obsess about this. The first thing a good employee wants is to clearly see how they’re helping the organization win.
Now look at the second need. Integrity must exist from the top to bottom of the hierarchy. If you’re in a position in middle management or above, you need to obsessively focus on this. The higher up you are the greater the burden. The last thing you want is a company-wide eye roll when the word is used by the CEO.
And in regard to the third need, respect, if you can’t respect every human being in your organization then you have no business being in management. You have the right to have an opinion on the person’s capabilities, talents, work ethic, and many other things, however, you must recognize each person’s inherent worth. You must be able to respect that.
These are the “big three” and all have one thing in common: they cost you nothing to put into action. They all represent a mindset — principles that are in (or not yet in) your head.
Keep in mind that employees don’t expect you to be perfect. You can have a bad day, you can be stressed, you can regret something you said or the way you said it. I’ve found that employees will forgive quickly if they know, deep down, you have these mindsets and you’re able to admit your mistakes.
Let’s go a little deeper with the concept of shared goals and values. When I first started out working, I was told to learn, do my job well, and good things would follow. That framework no longer works with the current generations. They want a clear path for their career that spells out what they need to do and how they’ll benefit.
Having gone on to serve as VP of human resources in various industries, I’ve created what I call Value Pathing to address this concern. It provides a direct relationship between personal and professional development: acquired skills, desired results, and total rewards. A main component of Value Pathing is the rejection of compensation based on “time served.” Time served is an artificial system that has no relationship to performance and acquisition of additional skills. As a result, not all the rewards of Value Pathing equate to monetary compensation.
Beyond a stable workforce, every business owner wants an efficient, productive workforce. They want less cost-per-dollar of revenue, and a major component of cost is payroll. The ultimate goal and a consistent result of Value Pathing is this: fewer people making more money per person with a much higher level of revenue-per-dollar of payroll. To achieve this, company leaders must set an increased standard, provide a path for success, motivate and reward their higher performers, and allow the lower performers to move on.
Think about how you’d feel if you were one of the successful employees. Would you feel valued? Would you feel loyalty? Would you tell your family and friends about your experience?
What if you were someone who was told this story by an employee? Would you want to know more about this employer?
Consider the criteria that enables employees to engage: How many items are covered by Value Pathing? The proactive pathway it provides benefits both people and profits — and greatly minimizes your employee turnover problem.
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