“So much of employee retention is driven by effective leadership and company culture.” According to the common wisdom of today, this goes without saying. However, new research reveals this belief to be a partial myth that can undermine organizational success.
AETHOS recently conducted a survey to understand what motivates and retains “cross-generational” employees. This study focused on Gen X (born 1965–1980) and Gen Y (born after 1980 and also known as Millennials) for the sake of simplicity and since these two generations form most of the global workforce. The sample skewed toward North America (75 percent), while the other quarter represented employees in Europe and Asia Pacific. The responses did not significantly correlate with gender or geography, so only generational differences were considered in the analyses. This research yielded a “Hierarchy of Work Needs”—four specific variables weighted based on the reported effectiveness of motivating and retaining team members.
Two of the motivators (or 50 percent) in Figure A support the common belief about employee retention. However, the other 50 percent of these motivators—i.e., the second and third variables with the most weight or importance—deal with tangible rewards linked to compensation and benefits. Overall, both Gen X and Gen Y are best retained with a formula encompassing “Balance, Bucks, Benefits, and Boost (internal purpose and opportunity).” Of these, “benefits” is arguably the most overlooked, even though it is apparently the second strongest factor driving retention.
Three Surefire Wins in Employee Benefits
Without getting bogged down with details on the investment dollars involved, not all employee benefits assume direct costs. In fact, retaining top talent brings cost-savings and even increases in bottom-line profits. Simply put, retention equals ROI. Here is some more insider information on benefits:
1Think beyond plans.
Although health and medical benefits are typically the first benefits that come to mind, the “Hierarchy of Workplace Needs” shows that employees are most concerned about their way of life. Employees deal with considerable daily pressures, ranging from work transportation to childcare before and after school. If a company is not doing everything it can to offer a competitive healthcare benefits and retirement savings plan, as well as tangible benefits that promote work-life balance, that business could very well be sabotaging its own success by forcing top employees to look for better opportunities—and balance—elsewhere.
2Create customized incentives.
Given that employers receive tax benefits for their employee 401(k) contributions, having these programs in place offer tangible benefits for the business. However, many hourly employees must work second jobs to support their families here and abroad. In these instances, being an employer of choice is not just about providing competitive wages, healthcare, and retirement plans. Now, it comes down to how the employer can customize benefits to fit an employee’s specific needs. Perhaps this means more flexibility and allowing some employees to work from home one or two days a week. For others, it may mean creating a schedule that allows them to drop-off or pick-up their children from school—modifying their shifts to start or end at unique times.
Some employers opt to have catered lunches brought in for their staff. Of course, this can become costly over time. One “quick fix” is to evaluate a company’s employee break room–who designed it and what, if any, messaging is on the walls? Allowing employees to customize it with input from their own teams, not to mention fresh paint and better lighting, will go a long way to show that the company cares about them, even when they are not “on the clock.”
Creating an environment where employees are comfortable sharing information about their personal lives with leadership can go a long way in building a culture of caring, respect, and trust. People frequently joke about having their “work family,” but if leaders truly do care about their employees, they will reciprocate by going above and beyond for the company and its goals—this is what workplace psychologists and HR professionals call “organizational citizenship behaviors.” This should also tie into training, mentoring, and continuing education—all of which give employees a sense of ongoing “marketability” and job security. Providing a clear path to success and career growth means that employees are much more likely to be engaged, productive, and loyal. Furthermore, an interesting side effect of this is that employees will be more likely to refer friends and colleagues to join the organization, leading to greater staffing numbers and fewer openings in the company.
Engaging to Begin the Process
One of the best ways to understand and address the retention issues of “Balance, Bucks, Benefits, and Boost (internal purpose and opportunity)” is by “engaging” the company’s employee base, opening the lines of communication, and asking for specific feedback from employees at both the property and corporate levels. These conversations should occur annually at the very least, allowing employees to offer insight into what is important to them, what is working and what is not, and specific areas in which the hotel company can improve their offerings to employees. By conducting these informative meetings on a regular basis, employees will feel their input is welcomed and valued, whereas organizations gain valuable insight into the ever-changing needs of their most valuable business asset.