How to Retain Talent in a Competitive Labor Market

In a post Covid world where working remotely is becoming the norm and employees are enjoying more flexibility than ever, how do employers retain top performing employees? An obvious answer would be money, but is this all there is? We are definitely entering into an era of war for talent. How do employers compete for top performing employees?

In business school, we learn about what motivates people. There are two kinds of motivations: intrinsic and extrinsic. Let’s dive into each separately.

Extrinsic Motivations

These are the first things that come to mind when people think about what makes a job offer competitive.

Salary

This is, of course, one of the fundamental building blocks of a competitive job offer. Employers should evaluate the ongoing market rate for various kinds of positions and offer salaries that are competitive or even slightly higher than the ongoing rate. This is your most direct way of saying “we value your talent, and we will compensate you as such.” Because salary is cash in hand and is paid immediately on a regular basis, many employees view this with more weight than other factors such as equity.

To find out what’s the most recent comparable salary for various positions, there are many resources available for employers to check, such as Payscale or Indeed. Websites such as Glassdoor or Blind could offer interesting insights as well. For high level hires such as C level executives, some private recruiting firms tend to have the most up to date intel.

Equity

We once wrote an article about the various kinds of equity grants. For a startup that may be limited in how much cash salary they can offer, offering equity can be a great way to keep the employees motivated and align them with the upside of the company. Because equity tends to be structured with some kind of vesting schedule, it’s also a great way to ensure that the employees stay at the company for a significant amount of time to ensure stability and knowledge retention.

Benefits

Another factor that’s top on the employee’s mind is benefits, which typically includes things like health insurance, 401k matching, other employee assistance programs such as fertility related benefits, etc. Some companies have gone as far as providing mental health related programs and even meditation! One common theme is to offer benefits that allow employees to focus on work and not to worry about anything else that may cause them stress. At Sleegal, we can help employers offer their employees a legal consultation platform where they can just ask any legal questions they may have and be connected with a high quality yet reasonably priced lawyer in minutes. If you are interested in finding out more about this offering, please let us know by emailing us at info@sleegal.ai.

Other Perks

Other typically silicon valley perks are free gym membership, onsite child care, unlimited vacation time, drop off your dry cleaning at work, continued learning opportunities, etc.

Intrinsic Motivations

One aspect that lots of people may overlook is it’s not all about the money. Especially for millennials, the golden handcuff may no longer work. There are other factors that they value a lot more than money or perks alone.

Freedom and Autonomy

One thing that many employees value, especially if they are highly competent, is the ability to get their work done in their own way without being micromanaged. A strong manager will know the balance of setting expectations and giving the employees the freedom to accomplish the goals in their own creative way.

Acknowledgement and Respect

Another factor that the top talents value a lot is gaining the respect and acknowledgement that they deserve once they demonstrate their ability. Having managers that know how to acknowledge the accomplishments of the team can be critical. Don’t just have managers that distribute the work and collect the honor. Have managers that actually help with the work, and when the time comes, acknowledge and let their employees shine with what they have accomplished.

Ability to Try Different Things

One main reason that top talents burnout is due to boredom. Because they are highly motivated and capable, repeating the same tasks tends to make them bored and thus want to quit and try something else. To retain such top talents, the ability of the company to offer their employees the chance to try different things becomes critical. This includes lateral moves such as rotating through different groups, as well as upward opportunities such as allowing the employees to expand their scope and take on more responsibilities once they show they have excelled at doing what they are currently doing.

Clear Career Path and Growth Potential

A related point is every good soldier wants to be a general. To enable this, the company should have a clear career roadmap with defined roles and responsibilities and show the employees that there is a path forward. When the employees demonstrate they are ready for the next step, make it happen instead of keeping them static in their current role due to various bureaucratic reasons. Granted, not everyone can be promoted to the next level at all times, but to chart out a path and deliver on the promise is key for the long term success of retaining top talents.

Mentorship and Sponsorship

The higher an employee moves up the ladder, the more important this becomes. Offering an official program where employees are matched with executives by certain criteria (e.g. female leaders) can be very helpful to make it happen. Even without an official program, encouraging the company leaders to mentor and coach employees earlier in their career can go a long way. Top talents need to feel that they are being “groomed” for the next big thing.

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