I have been speechless lately for two reasons. The first reason is that I am getting married this month. Let me tell you, coordinating my huge family, each of whom has different opinions, is like trying to reorganize a large company of people who have no idea of their roles and responsibilities. If I believed my family would actually follow a job description, I would write one for each person.
Second, I have been a bit overwhelmed over the last four months at the increased number of personal e-mails that I have been receiving from my NexGen counterparts who are suffering from a bit of decreased morale. I wanted to get to the bottom of this issue and I think that I have.
If you think about it over the past year, these younger advisors have seen an increase in workload serving clients and salary freezes. But just a word of caution: if the economy continues to recover and your NexGen employees continue to feel a lack of motivation in the workforce and no reward in the area of compensation, you may run into serious retention problems.
According to U.S. Labor Department data collected since 2000, fewer employees are quitting their jobs. However, there is a high likelihood that as soon as the economy turns around, unsatisfied employees will look elsewhere for employment. This prediction is based on what should be a repeat of the expansion that followed the 2000 recession, an 34% increase in employees quitting jobs from July 2003 to December of 2006. In order to prevent this, you have to make sure the grass stays greener on your side of the fence
Many owners have already separated the wheat from the chaff and know who their best employees are. Now you have to make sure that you can keep them. According to what I am hearing from NexGen employees (there are several national employee studies out there to back this up) there is a disconnect between what employers and employees consider most important: Employers are more focused on the climate of the management and workers’ relationships; employees are more focused today on pay and benefits because of the current economic times.
With the recovery of the economy, employees are feeling less committed to their employers, and employers need to make sure that they are focusing on the needs of their best employees. Considering the costs of turnover ranging from 150% to 250% of annual compensation, including salary and other benefits, it is imperative that budgetary decisions are made very carefully to protect the investments you have made in your most valued employees.
Now is the time to make sure that your best employees are rewarded for their efforts. If you have made temporary deductions in salary, be sure to discuss how and when that will be reversed. Be as transparent as possible with your numbers and encourage discussion, ideas, and open communication. If pay cannot be increased, look for creative ways to compensate employees via telecommuting or flexible work schedules.
Instead of creating annual goals, consider biannual or quarterly goals with your employees to create an environment of encouragement and intrinsic reward. With your most valuable employees on board, your team will be able to fly past retention issues.
Oh, and along the way, snatch up some of the best human capital investments as the economy continues to recover.