Report: Strong Culture and Career Development, Not Perks, Are the Ways to Retain Top Talent
Flexible hours. More vacation time. Work from home. Free gym memberships. Free snacks. Company-sponsored outings. Student loan payment assistance. These are some of the perks that companies dangle in order to attract top talent to their ranks.
The perks are likely going to become more plentiful in the new year as the labor shortage is likely to remain in place and there are threats of a possible economic recession. As the Wall Street Journal noted, there are about seven million jobs that have gone unfulfilled and as companies compete for top employees, job perks are going to continue to be among the tactics used by companies. However, those perks aren’t likely to be enough as the competition heats up. What will likely be the clincher for an employee deciding between companies is the culture. Securing the top talent will largely be up to the way leadership has established a culture that is inviting and employees have a sense of belonging. In addition to that sense of belonging, it will also be important for employees to have a sense of trust in leadership. Employees, the Journal notes, want to know if management will help them grown in their roles enough to take on additional responsibilities, or move up in the company ranks.
The Journal noted that companies that make these kinds of investments see significant benefits in return. Companies that invested in their employees’ futures and positively engaged with them saw a profit gain of 26 percent during the last recession. The Journal cited a recent study by Bersin, a human resources specialty division of Deloitte Consulting that showed the most profitable companies are looking within and “actively cultivating current workers to fill future openings.” The study showed that the top 13 percent of companies cited by the Bersin study “were five times as likely to develop and promote insiders in a systematic way, and three times as likely to retain top talent, than the lowest-performing companies.”
In October, BioSpace compiled multiple indications of what constitutes good culture at a company. Not only should a company have a clear mission and values, a good sign of a how a company treats its employees is to look at turnover. If there is high turnover, the culture may not be a good one. Employees who are happy and engaged with the company are more likely to remain with that company. Other signs of a strong company culture are how visible and accessible leaders are. Having leaders who are accessible creates an environment that everyone is “in it” together. Another sign of good culture is the opportunity for professional development. Programs that support employee development validate the company’s commitment to its workers.
In its analysis of the job market and how companies can continue to grow during the labor shortage, the Journal pointed to several companies like Mastercard and Intuit that both stress career planning for employees and promoting from within. These two companies do not only have strong cultures, but are also among the more profitable companies within their industries. Mastercard has job-rotation opportunities that allow is employees to build skills for jobs higher up the corporate ladder. Also, its human resource officer plot career paths to those higher jobs to help employees understand the skills that are required.
Intuit invests heavily in professional development opportunities. The company fills 28 percent of its job openings with those who are already employed, rather than outside talent. By fostering a sense of belonging, not only are companies ensuring low turnover, but they are also empowering employees with the understanding that in many cases, it’s OK to take risks in innovation, the Journal noted.