Companies and their management are constantly weighing the needs of the business with the wishes of employees. It is a balancing act. When done well, a company is able to provide enough flexibility, incentives, inspiration and consideration for the well being of its employees while still ensuring the needs of the business are met. When companies such as Best Buy or Yahoo are struggling, however, management finds itself in the difficult position of having to make sharp adjustments to policies in order to achieve balance again. Those adjustments can often be difficult to swallow for the organization’s employees. In the case of Yahoo, for example, their policy rescinding remote employees primarily impacted about 200 workers employed to work from home full time. The decision was met with a huge outcry internally and a great deal of criticism externally. What Yahoo may have gained in improving innovation and collaboration may ultimately be lost in employee loyalty and morale. That remains to be seen.
While businesses like Yahoo and Best Buy may find it necessary to rescind employee-friendly workplace policies, it is certainly not the national or global trend. Many companies, particularly those that are cutting-edge or are fiercely fighting to lure top talent away from competitors, are looking for more ways to provide employees with a work structure that makes sense for both the business and the individual. This is especially true since women now make up such a big part of the workforce. As companies move forward in an age of better technology with employees who value work/life balance, managers will increasingly have to grapple with their own position on workplace policies. What should businesses take into consideration as they try to strike a balance between a company’s needs and the needs of its employees?
The key to figuring out how to balance the needs of the business against those of the employees is to look at each business’s unique situation. Forget about doing what other companies are doing. There is no cookie-cutter program or approach that works best for all companies. For businesses such as Yahoo and Best Buy — searching desperately for ways to turn around their ailing and flailing brands — doing away with remote employees may be one of several medicines that they try in the hunt for a cure. For other healthy businesses, there is an increased effort to provide employees with flexible work arrangements. Companies that currently allow employees to work remotely include Staples, Raytheon, Uline, Perot Systems, Cybercoders.com, Leapfrog Services, Inc., Verizon Wireless, UnitedHealth Group, IBM, and Microsoft… to name just a few.
Some recent studies may explain why so many employers are embracing employee-friendly work schedules and placements. MetLife’s 10th annual survey of employee benefits, trends and attitudes released a year ago put employee loyalty at a seven-year low. One in three employees said they planned to leave their job by the end of the year. According to a 2011 Careerbuilder.com report, 76% of full-time workers, while not actively looking for a new job, would leave their current workplace if the right opportunity came along. Another study showed that currently the average company loses anywhere from 20% to 50% of its employee base each year. The average cost for a company to replace just one mid-level employee is about $37,500.
Given the real cost of employee turnover, workplace accommodations is on the rise, not decline. A recent survey of 1,500 business owners by Elance, a website that matches employers with employees who can work remotely, found that 73% planned to hire remote workers. That same survey also showed that 54% of business owners said they expect the majority of their workforce to work online by 2017. Thus, while a company such as Yahoo or Best Buy may be going in the other direction, it is not a sign of the times. But ultimately national trends don’t matter. Each business must create policies that make the best sense for that individual business.
Work Force Loyalty Factors
In order to determine the type of policies and programs that make the most sense for a company, it helps to consider the top factors that affect employee retention and loyalty. Ultimately the goal is to provide the kinds of accommodations that employees will value, thus bonding them further with their employer.
In a survey, Aon Consulting identified seventeen factors significantly related to work force commitment. Of those, five were determined to be true drivers of retention or loyalty.
1. A fearless culture – A major driver of employee loyalty is a fearless work culture. That is defined as an organization where employees can comment openly about the status quo, even challenge it, without fear of retribution because they know where the organization is headed and how the employee fits in and contributes to the chosen.
2. Job satisfaction – Barbara M. McGuiness explains in “The Change in Employee Loyalty,” that Gen Xers and Millenials (employees in their 20s, 30s and 40s) place a higher value on personal achievement over corporate goals, diverting their loyalties inward. It helps them for the organization to understand its employees personal ambitions or aspirations and find ways to align those with the organization’s mission. For example, if the receptionist at a company is interested in social media, that person could be moved into the marketing department to help with online sales, social media efforts and improving an organization’s customer engagement. That leverages the employee’s talents and interests to the benefit of the organization. This requires management to be proactively learning about the interests and talents of all its staff.
3. Opportunities for growth – Loyalty is driven also by each employee’s opportunity to ‘grow’ which includes not only the ability to expand work responsibilities and rise in position, but also to advance in pay. A study of employee loyalty revealed that while 80% of the workers surveyed would recommend theirs as the best place to work, 40% of the same group would go elsewhere for a slight pay increase.
4. Recognition of work/life balance needs – The importance of family issues and how employers allow staff to deal with family-related matters is a major driver of loyalty. In a recent survey, US West indicated that 70% of their employees said that balancing home and work was stressful and one-third of all employees had taken a day off in the prior year due to some family concern. As employers find ways to allow employees to balance their work with the demands of their life, they increase employee loyalty and decrease employee turnover.
5. Organizational direction and mission – Executive leadership can demonstrate the value of the employee to the organization by setting high expectations, communicating constantly, empowering, investing in employees’ financial security, giving recognition as often as possible, counseling people in their careers and educating them.
Employee Retention Strategies
Based on these five drivers of employee satisfaction, here are eight ways that an organization can help increase employee retention.
1. Increase internal communication – Employees want to feel that they are contributing and making a difference. Help employees to see the big picture and how they contribute to a functioning whole.
2. Increase training to increase confidence – Employees need training to do their job confidently and to facilitate career advancement within the company.
3. Establish a mentoring program – Train and encourage seasoned employees to be mentors to facilitate dynamic skill.
4. Promote team building – Team building activities foster trust and acceptance. Strong, teams increase loyalty. People will stay where they feel needed, wanted and accepted.
5. Encourage openness and honesty – Respect employees through degrees of transparency. Communicate how the business is really doing on a quarterly or semi-annual basis. Provide information to understand shifts in corporate policy due to the economic or competitive environment. (Yahoo did a poor job with this before implementing their policy change.)
6. Retrain or replace bad managers – Poor managers bring down employee morale, which spills over into the engagement level of customers.
7. Recognize employee contributions – Recognition from a supervisor of at least two ranks above an employee makes a meaningful, engaging difference in employee morale.
8. Manage employee engagement with technology – Technology systems can be used to centralize surveys, gather employee feedback and track both qualitative and quantitative information. Third-party systems provide for employee anonymity, which encourages open and honest employee feedback.
Quote of the Week
“People may take a job for more money, but they often leave it for more recognition or consideration.” Bob Nelson
© 2013, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.