Our research shows that executives value loyalty more than job performance in employees—but most are not doing what it takes to keep their employees happy in their jobs.
The holidays offer companies a host of opportunities to make their staff happy. From holiday parties to year-end gifts, management can show their employees how much they value them in various ways. As we have discussed frequently on the blog, the thing employees value most at the end of the year—more than any other job perk— is compensation and merit-based rewards.
Just as the holiday season is a good time for companies to make staff feel valued, employees can also use the time to affirm their loyalty and commitment to the company—perhaps by setting new learning and development goals for the year ahead.
A recent article on San Francisco Gate gets down to details about tech firms’ holiday spending—reporting that some companies spend over six figures on these seasonal events in the hopes of attracting talented, younger workers with elaborate menus, custom props, and novelty event spaces.
And while an over-the-top holiday party may not be in the cards for most firms, these events—even simple lunches in the conference room—do build camaraderie among co-workers and offer networking opportunities for those looking to get ahead. In the long run, throwing a lavish event is not as important to employees as the basics (like competitive compensation and merit-based bonuses), but might offer a good opportunity for executives and employees to get on the same page
Offering the right benefits and incentives is critical for companies looking to attract and retain the best employees.
Our Workforce 2020 surveys show that competitive compensation is the most important benefit for employees, followed closely by bonuses and merit-based rewards. Not only do employees say competitive pay is important–they also say more money would increase their loyalty and engagement with their current company.
But cash isn’t the only benefit that’s important to employees. Respondents also likely say career development, training opportunities, and a good work environment play a part in their loyalty to the company.
Héctor Cerviño of Banco Compartamos in Mexico (one of the HR executives we interviewed as part of our research) puts it well: “First of all, you have to pay well. It sounds very simple, but you have to pay well. If you pay well, then you can talk a lot about, you know, flex time, home offices…That’s all the cream in the coffee. But you have to have the coffee.”
Companies are having a hard time finding skilled employees. In fact, nearly half of the firms we surveyed have trouble recruiting employees with even base-level skills. These challenges in the talent marketplace suggest that companies should focus more on identifying and developing talent from within—yet most of them are not doing so.
Fewer than one-quarter of executives say their companies widely offer education as a benefit to keep employees loyal and engaged, and less than half say their companies have a culture of continuous learning. What’s more, employees may not be motivated to develop skills on their own time, as most companies are not sending the message that there is room for advancement: only 31% of executives say when a person with key skills leaves, they fill the role from within the company.
As globalization makes the task of managing a workforce increasingly complex, businesses need to create broad, sustainable learning cultures. This may start with incentives for pursuing education, continuous training opportunities, or stronger mentoring programs (but beware tedious, impersonal, and mandatory development programs). Providing employees with a clear career path and allowing them to develop key skills will increase loyalty among employees and build a stronger workforce that can take the company forward.
The talent strategies of large, successful companies like Google, Facebook, and Netflix are in the news often these days—more and more, people are making the connection between HR strategy and business success. This widely-shared slideshow created by Netflix executives Reed Hastings and Patty McCord has become an influential document in the HR landscape.
The 127-slide presentation covers Netflix’s culture, values, and management strategies, many of which diverge from the norm—for example, the company ignores most benefits in favor of top-of-market compensation, and they support a culture of flexible self-improvement (i.e., through experience, observation, introspection) over formalized development (i.e., through mentor assignment, set career paths).
This flexible approach to development works for the ideal Netflix employee—the “rare responsible person” who is “self-motivating, self-aware, self-disciplined, self-improving” and who “acts like a leader, doesn’t wait to be told what to do, and picks up trash lying on the floor.” Netflix believes this type of employee “[thrives] on freedom and [is] worthy of freedom,” and that ultimately, allowing more freedom will attract innovative thinkers and result in long-term company success.
You can learn more about Netflix’s HR strategy by reading the full slideshow.