Recruitment and Retention: Business Myths and Reality

By Hedley Larson
With the never ending escalation in the cost of employee-sponsored benefit plans and work/life programs, and with growing lack of employee loyalty that results in increased voluntary turnover, many companies are rethinking and redesigning their benefit plans and work/life programs. Their goal is often the same: reduce voluntary turnover to remaining competitive with other companies and the competition. Many of the underlying assumptions associated with changes in these plans and programs should be understood and fully tested before instituting any changes.

Our experience as corporate business executives and working with numerous companies and business leaders has surfaced four frequent myths or flawed assumptions associated with the need for change in benefit or work/life programs.

Myth #1

There's only one way to keep good people. In today's world, loyalty is directly related to pay and equity. If we don't put more money on the table, we will neither get good people nor retain them. While competitive pay is always essential to any business enterprise, research has clearly demonstrated that money does not buy employee loyalty or commitment. The reality is that people want a company that offers challenging work, provides a great working environment, offers to some degree personal options and flexibility (e.g., flexible hours), meaningful participation and communication, a sense of belonging, and a promising future. So, before rushing to redesign your compensation program, take time and give attention to understanding the value of other cash and non-cash plans and programs as well as revisiting the key attributes of your company culture that create and maintain your business as a "Great Place to Work."

Myth #2

My people leave because of better job offers and more money. In a competitive market, bigger or more successful companies can offer prospective employees tremendous job opportunities and compensation packages that we simply can't offer. Even the best or most loyal of our employees weaken when tempted with a higher salary. Surveys of employees continue to illustrate that they are not lured away by other companies or competitors. The reality is companies lose them due to inattention, lack of respect and recognition, a lack of knowledge of the company's business plans or objectives, favoritism, a lack of training and development, and how they can make a difference. Employees' who have proper direction and leadership, are fairly compensated, hear often about the company's progress and how they can or do contribute to its success, have challenging work and who feel they are a part of a team, list these attributes high on their list of working for a great company. Moreover, these employees find that they also have a sense of how the company is doing - financially and competitively, how the company plans to grow, and how they fit. When these factors are at work and are effectively and consistently realized, employees are not as likely to leave for other employment.

Myth #3

We need to do a better job recruiting to address our turnover problems. People will leave regardless. We need to "do whatever it takes" in our recruiting efforts so it doesn't affect the business. The most obvious solution is not always the best one. The reality is that endless recruiting to fill positions left vacant by voluntary turnover is like pouring water into a leaky bucket. It is far less expensive to uncover the real causes of excessive turnover and address the "root cause" problems. After all, companies recognized as "Great Places to Work" do not suffer high voluntary turnover. More often than not, the solution to this problem starts with the leadership of the organization, not the perceived effectiveness of the company's recruiting effort.

Hedley Lawson, Jr. is the managing partner, for Aligned Growth Partners, LLC.


Labtalk June 2020