The Workplace Has Stopped Making Sense - Tying Together Turnover, Reward Budgets, and Onboarding
How these are all related given our unique work times
Recognition and reward budgets are increasing
Employees are remaining in their roles
The focus is on improving the onboarding experience
Loud quitting and quiet quitting seemed to have run their course. The turnover rate of the past two years is on the decline. The market has stabilized, and organizations are not hiring to the extent they had been. The data suggests more than 2 million employees who would normally be tempted to move jobs will stay put. (That’s a population the size of Nebraska) The big question is if they are happy or unhappy and just sticking around?
As an aside, Boomers are staying put longer. When they decide to retire there will be a breaking point when companies will have to fill those roles.
Cue the great onboarding experience to give people a great impression of your company, learn your values, and you get to know them as individuals. Then reward their efforts over time so they stay engaged and foster a positive culture.
Lower turnover shouldn’t be taken as a case of disaffected employees bringing threatening to bring down the entire organization with a grumpy attitude. Instead, it is opportunity for the organization to build an even stronger culture by increasing its employee recognition spend.
Today’s environment doesn’t call for the creation of a new, post-COVID, great recognition etc., culture. , iIt calls for an enhancement of all the positive aspectsaspects of your organization’s culture already has. Bring a new philosophy to your employee rewards that is based on unique structures and not the same, out of the box, ones that have been used year in and year out. One possible solution is for your managers to get to know your employees their direct reports and see them as an investment. Likely Your employees arethe organization’s most important investments.
This has resulted in an unusual situation where employees aren’t leaving. For organizations hiring is now no quitting. So how do you prepare a recognition and reward program when your employees seem to lack the motivation desireto leave the organization? Such a situation would seem to lead to a reduction in employee engagement spending. This conclusion is wrong.
This presents the unique situation of how do you keep the employees you want to keep properly motivated? There are going to be long-term employees who you want to build relationships with who may leave in the future if, when the hiring winds change again, they see a better opportunity.
There are also the employees who are “hanging around.” These may be the employees who don’t want to leave because they can’t leave. They are poorly motivated or otherwise lackingare lacking in some other way. It creates the possibility of the proverbial bad apple ruining the barrel.
While many employees are staying and yes, including the ones who just won’t leave, you have a unique opportunity to prepare for those times when the pendulum once again swings towards employees leaving for greener pastures. The act, unto itself, is easy. Recognize and reward them. By doing this we’re not talking about the quarterly gatherings where one person is pulled out, embarrassed and given a plaque soon to be forgotten.
Ideas like that went out with the fax machine.
What is necessary now is to build a reward system that is part of into the larger compensation system. None of it will be pre-determined, all of it will be based on achievement and accomplishment. This will serve the dual purpose of rewarding the employees who make significant contributions both large and smallof all types. It could also result in the employees who might otherwise underachievethe underachieving employees improving their performance since they now can be rewarded for things that, previously, they wouldn’t.
All of this requires the full support of all members of the senior management team. A half-hearted, wait and see approach would, most likely, result in the failure of this program. Just as managers will work to use an engagement-based solution to motivate employees, leadership must demonstrate its support by ensuring that the mid-level managers understand what they can expect from success.
Takeaways:
· Turnover has slowed down for the time being. People are not leaving their jobs like they have for the past few years. years.
· Organizations have to keep the top-tier performers motivated while avoiding the risk of the lower performing employees “dragging” down the entire team.
· The best course of action Is to design a compensation solution that rewards performance. By doing this, the highly motivated employees continue to act at a superior level since it improves their overall compensation. There is also the chance that the underperformers will improve their performance since they have the chance to increase their own compensation
Data
Turnover metrics vary. Starting with Bureau of Labor Stats data https://data.bls.gov/PDQWeb/jt
2023 turnover across all private enterprises has been hovering at 3.9 - 4.0%. Compare that with 2021 when turnover was between 4.4 and 4.6%. With a labor participation rate of almost 170,000,000 employees half a percent is almost 2 million people sticking around. And this is not specific to industry, sector, where skills and needs vary.
Recognition spending is increasing
ADP stats
ADP called out the sSapient report that recognition and rewards are in the top 4 spend categories projected in 2024. https://sapientinsights.com/product/26th-annual-hr-systems-survey-white-paper-report/
Classic Framework when assessing workforce stability and improvement opportunities
· Assess Current Workforce Stability:
· Analyze the current turnover rate and its impact on our organization.
· Determine the percentage of employees who are likely to stay long-term and those who may be disengaged.
· Develop Recognition and Reward Program:
· Design a recognition and reward program tailored to motivate and engage employees who choose to remain.
· Ensure the program aligns with our organizational culture and values.
· Identify Key Employee Categories:
· Categorize employees into groups based on their performance, motivation, and potential.
· Recognize the importance of retaining top-tier performers and addressing potential underperformers.
· Build a Comprehensive Reward System:
· Create a reward system integrated with your compensation structure.
· Avoid pre-determined rewards and focus on achievement-based recognition.
· Consider both significant contributions and incremental accomplishments.
· Secure Senior Management Support:
· Gain full support from senior management for the recognition and reward program.
· Emphasize the importance of leadership's commitment to its success.
· Communicate Expectations:
· Ensure mid-level managers understand the expectations for success.
· Provide clarity on how the program will motivate and reward employees.
· Monitor and Adapt:
· Continuously monitor the effectiveness of the recognition and reward program.
· Be ready to make adjustments based on employee feedback and changing circumstances.
· Prepare for Future Shifts:
· Anticipate the possibility of increased turnover in the future.
· Be prepared to adapt the program to address potential changes in the job market.
· Emphasize Individual and Team Performance:
· Encourage employees to excel individually and contribute positively to the team.
· Highlight the benefits of improved performance, both individually and collectively.
· Focus on Long-Term Employee Relationships:
· Invest in building strong relationships with long-term employees.
· Show ongoing support and appreciation for their dedication to the organization.
By implementing these action items, we can effectively address the current workforce situation, maintain motivation among top performers, and provide opportunities for underperformers to improve, ultimately contributing to our organization's success and culture enhancement.