Employee Compensation: Retaining Your High-Performers
Forgive us if you’ve heard this before… but in order to actually keep quality employees you have to put forth a strong effort to improve communication, hire strategically and increase company morale.
Take this into consideration: Companies that up their number of talented managers and double the rate of engaged employees achieve, on average, 147% higher earnings per share than their competition. No seriously, it’s true. This survey by Gallup proves it.
So, what are ways to retain employees? How do you keep your talented workers engaged, interested and, above all, loyal to your company? Promote them. Why? Keep reading…
The Benefits of Internal Promotions and Employee compensation
You’ve probably heard this phrase sung from the mountain tops since the beginning of time, but it’s true, it’s better to promote from within. Here are just some of the benefits of promoting internally:
- Promoting from within ensures you have an employee to fill a new roll, that already fits in with your company culture, understands the company mission and values and has experience with the company’s organizational structure.
- Internal promotions also boost company moral (in that other employees have higher hopes that they too will be promoted.)
- External hires are 61% more likely to be fired or laid off than internal hires.
- Promoting existing employees provides you with unique opportunities to develop them for critical roles through learning and development. They’ve already shown they fit in and are dedicated to the company, they just need help gaining the right skills for the future.
- Promoting from within is cheaper. In fact, according to SHRM, it costs 18%-20% more to pay for external hires compared to internal hires.
- 21% of external hires are more likely to leave their newly appointed job on their own accord.
Proceed With Caution!
Underestimating your employees is a mistake, but so is expecting the moon from them (at least not right away.) Challenging your employees is a fantastic way to keep them engaged. In fact, 64% of Millennials would rather make $40K a year at a job they love, than $100K a year at a job they think is monotonous. Ryan Holmes, founder of Hootsuite, weighed in on how doing internal promotions right can bring great benefits:
“I’ve seen this time and again…An employee may start out in sales, for instance, selling our social media management tool to clients. Instead of pursuing a senior sales role, however, he or she makes the jump to marketing. The learning curve can be steep initially, but in time you’ve got someone who knows exactly what prospective customers want and how to translate that into ads and marketing campaigns. That’s an employee worth keeping… and promoting.”
Promoting an employee to a job they aren’t ready for can prove detrimental to both the company and the employee’s confidence. For starters, according to BambooHR, 23% of surveyed employees want their responsibilities clarified and 21% want better training. These things are not difficult for companies to improve on and if they want to reap the benefits of internal promoting, they should get started fixing them now.
You might be wondering, “It’s their choice to accept or decline the job. I’m not psychic.” Put yourself in their shoes: your manager, who works beside you regularly and does your performance reviews and is someone you (hopefully) trust, comes to you and tells you the company is interested in promoting you. You’re going to say YES. You have just as much idea of how well they are going to perform in this new position as they do. Here a few things to help heighten awareness about employees’ strengths and weaknesses:
- Communicate regularly with them about their work. Tip: Download a performance review template to stay on track with these conversations! This will keep them on their toes and engaged in their work. When the time comes to chat about promotion and compensation, you want it to be easy-going and comfortable for both parties. Be sure to mix it up: some face-to-face meetings, emails, instant messaging, etc.
Tweet This: Make communication with employees regular so promotional conversations down the road are easy-going.
- Provide a good balance of positive reinforcement and constructive criticism so they can keep track of what they’re doing right, wrong and how to fix it.
- Challenge and engage them by periodically assigning them a new task to complete that is outside their normal workload. This will teach them how to adapt to change and may even bring out new talents they (and you) weren’t aware of.
- Make sure they are able to destress every week. Have them tell you what they feel was their best work for the week and, in exchange, give them positive feedback.
You Can Do It
The benefits of promoting internally are hard to ignore, as they should be. Sometimes bringing external hires may be your only option, but in terms of cost, value and the overall goals of the business, you should do all you can to develop and retain the employees you already have. They want you to invest in their career. Don’t fight it. Give them what they want!
Tweet This: Your employees want you to invest in them. Don’t hesitate!
Improving communication is key to keeping good work relationships with your employees. Let Reviewsnap’s performance management software get you where you need to be.