In this hyper-competitive global marketplace where capital is abundant, barriers to entry are low, and technological dominance is often short-lived, the principal source of an organization's competitive advantage is its people.
The top firms in the world understand this acutely and are willing to invest vast resources into finding the best ways to attract and retain elite performers. Far too many organizations, though, are misguided about where they can get the biggest returns on their people investments.
Free beer, on-site gyms, and ping-pong tables are often thought to be the holy grail of keeping superstar employees engaged and loyal. Add above-market pay, and many organizations think they have the winning recipe for long tenures.
Unfortunately, the facts state otherwise. The tech industry, most notorious for lucrative compensation packages, struggles with one of the lowest retention rates of any industry. Even at some of the most sought-after companies, such as Google, Amazon, Twitter, and Apple, the average employee stays less than two years (Source: Paysa, The Top Talent of Tech Disruptors and Titans, 2017).
Much of this high turnover is intrinsic to a fast-growing industry in which niche skills are scarce. Yet in many cases, organizations are failing to get to the root of what engages their top performers most - and this is costing them immensely. A Gallup study shows that disengagement in the workplace costs the United States an estimated $483 billion to $605 billion each year (Source: Gallup, State of the American Workplace, 2017). Moreover, some estimates put the total cost of losing an employee at more than 200 percent of his or her annual salary (Source: Center for American Progress, There Are Significant Costs to Replacing Employees, 2012).
The good news is that it's not extraordinarily difficult to engage and retain your best talent if you know the key elements that motivate them. According to the aforementioned Gallup study, these include giving employees clear role expectations, the ability to do what they do best, clear communication about the organization's mission and purpose, and a plethora of learning and development opportunities.
Facebook, Glassdoor's 2018 "Best Place to Work," echoes these findings. After studying its employee surveys over the past seven years, it has learned that young employees are looking for companies and roles that give them opportunities to contribute to a powerful mission, play to their passions and strengths alongside other brilliant people, and continuously learn and grow.
In my experience as a talent consultant to scores of the top Fortune companies, I concur - the companies with the happiest and most productive employees are those that provide work that is meaningful, enjoyable, and challenging.
Here are a few tips to begin addressing each of these pillars of engagement:
Provide Meaning in Your Employees' Careers
Young employees want to be a part of an organization whose mission resonates with their core values. But more than that, they want to do work that has a significant and direct impact on that end goal. When there's disconnect from the vision, disengagement soars.
Fortunately, most elite organizations already ensure every role and project closely aligns with the overall strategy. The greatest area for improvement is in communicating that alignment.
The key is to regularly highlight to every employee the state of the business, why decisions are being made, the context of the work to be done, how each job can contribute to their goals, and what obstacles will likely occur along the way.
One simple way to do this is to hold quarterly meetings with all employees in which the leader of every department makes a presentation on the most significant issues in each segment of the enterprise. Patty McCord, former chief talent officer of Netflix, instituted these regular meetings and noticed that they not only gave employees a deep understanding of the business and customers, but they also introduced employees to the leaders of each business unit and gave them an opportunity to ask questions - a huge engagement booster (Source: Harvard Business Review, How Netflix Reinvented HR, 2014).
Make Their Work Enjoyable
Just because employees understand how their work is driving the mission forward doesn't mean they'll come to work ready to be productive. They also need to be in roles that are relevant to their passions and strengths.
To better understand what energizes your team members most, ask them poignant questions that get to the heart of their satisfaction. Ask which projects over the past two years they've enjoyed working on the most and the reasoning why. Inquire about the times when they've found themselves completely immersed in their work that they lost track of time. Discover whom they have had the most pleasure working with. Discuss their hobbies and interests outside of work.
With this newfound arsenal of data, you'll soon be able to understand which projects, roles, and teams each employee will likely thrive in most.
Continue to Challenge Them Every Day
Even as employees exercise their talent and live out their passions alongside other brilliant creatives in pursuit of a mission that resonates, they also strongly desire ample opportunities to learn, develop, and grow in their careers.
They want managers who give them regular coaching, feedback on their performance, and advice about how they can gain new skills. They also need the tools, resources, and opportunities to do so, as well as rewards for excelling in those efforts.
AT&T is a vanguard in this effort. From 2013 to the fall of 2016, the iconic brand spent over $280 million on professional development programs and tuition assistance. Through its Workforce 2020 software program, workers can learn what skills will be paramount in the next five years and what training the organization provides to develop them.
Then, armed with this knowledge, workers can select from hundreds of learning options (e-learning, classroom, or university) to help them gain these critical skills of the future. These investments have increased engagement, decreased turnover and hiring costs, and prepared the organization for the digital future (Source: Harvard Business Review, AT&T's Talent Overhaul, 2016).
Above-market pay and fancy perks are nice, but to truly engage your superstars, give them meaningful, enjoyable work and invest in their career development.
Mark Mayleben is a partner at Jobplex Inc., a DHR International company and the fifth largest executive search firm in the U.S. He is also the founder and host of "The Talent Desk," a podcast dedicated to discovering how iconic brands attract and cultivate world-class talent and build vibrant high-performing cultures.
As an executive search consultant, Mark helps source, assess, and place executive-level talent in the consumer goods, retail, leisure, and tech sectors. Mark has led successful projects with Coca-Cola, HSN, Sodexo USA, Spirit Airlines, Timex, The RealReal, and many others.