There is one issue from which no business–regardless of size, type or location–is immune: employee turnover. Retaining top talent is a challenge, and this challenge is increasing in difficulty with the millennial-employee population.
According to the U.S. Department of Labor's Bureau of Labor Statistics, the median tenure of workers ages 25 to 34 is only three years. The cost of this turnover averages between $15,000-$25,000 per employee. Do the math.
Retaining top talent starts with creating an equitable workplace.
Instilling workplace equity involves cultivating an environment where employees are treated fairly by management and, in turn, employees treat management fairly. It seems obvious. We’ve heard something similar since childhood—The Golden Rule. But what may seem obvious in principle is often not so apparent in practice.
Here are four key assumptions that underlie workplace equity:
People work for rewards.
Think of this as balance—what you put in you get out. This doesn’t have to be true day-to-day, but, overall, employees need to feel like they are fairly compensated. This compensation is not just monetary. Giving employees increased responsibility, availability of resources, collaborative opportunities, continual feedback, managerial support, and professional-development opportunities are all ways to reward employees. At the end of the day employees want to know that they are getting just as much as they are putting in, and that they’re making a difference in the workplace. Make this the case, and you’ll be on your way to higher retention.
Related: 3 Phrases That Kill Intrapreneurship
People seek empowerment.
If the first condition is met, employees feel more pride and responsibility in the work they perform. To take this further, empower your employees and provide them with the resources necessary to grow. A lack of professional-development opportunities is one of the top reasons people leave jobs. Hear their ideas, listen to their concerns, and take action.
When employees are invested in a company they are more likely to work harder and produce more. Among the millennial—and upcoming Gen Z—population, catering to the innovative and entrepreneurial spirit is a key retention strategy. According to the Kaufmann Foundation, 54 percent of millennials have a desire to start their own business, with estimates of this number growing up to 72 percent in the post-millennial, Gen Z, population. Cater to this entrepreneurial spirit by empowering employees to innovate. Set up programs for intrapreneurship that allow employees to create within your organization. Make sure your top performers have the resources they need, and the support from their managers, to continue to develop.
People become stressed when they feel they are treated unfairly.
When people feel they are being treated unfairly, they will work to restore the perceived equity. Inequity breeds disappointment. Disappointment yields stress. Stress results in a loss of productivity. When employees feel that they are being treated unfairly, they become less productive and even counterproductive. If someone finds out a peer is making more money for performing the same role, a manager is spending extra time with one person over others, one person’s ideas are encouraged more, etc., productivity suffers. The employee’s attention is focused on the stress-inducing act instead of the task at hand.
How do you know if employees feel they are being treated unfairly? Ask. But be prepared to act on the response.
Nobody enjoys feeling like their ideas have no merit. One mistake managers make is asking employees for their thoughts, but not communicating after the performance review or feedback session.
Take this exchange, for example:
Manager: “What’s one thing you’d like to change about your current job responsibilities?”
Employee: “I really enjoy what I do, but I’d like the chance to learn other areas of operations within the company.”
Manager: “OK. Great.”
Then the conversation ends. The manager takes notes, but never acts. The employee feels undervalued and looks to restore equity.
People who experience stress will try to restore equity.
If you’re going to ask a question, be prepared to respond with words and actions. If this is a feasible request, work to make it happen. If it’s not actionable now but may be in the future, communicate why and work with the employee on an interim solution. If it’s not realistic at all, explain why and ask what other ideas the employee has to continue the discussion.
If you feel you’re being treated unfairly, you’re likely to do something about it. The same goes for your employees.
With workplace equity, what goes around comes around. If you want to retain top talent, focus on establishing a culture with ample professional development opportunities, that empowers instead of commands, and that serves as a platform for innovation and intrapreneurship.
(Author's Note: The four principles are explained in Goodall, Goodall and Schiefelbein’s Business and Professional Communication in the Global Workplace (2009, Cengage-Wadsworth). The concepts were first presented in research by Walster, Walster and Bershied in 1978 and Wilson and Goodall in 1991.)