Making short-term loyalty pay

June 7, 2006
This article isn’t about fighting the causes of high turnover—a costly battle whose odds are not in your favor. Instead, it’s about creating enough short-term loyalty to achieve maximum payback for the one to three years you might enjoy the services of an employee. It’s about getting amazing results from workers who, for whatever reasons, are just passing through.

It’s not news that job-hopping is in and loyalty is out. Let’s face it: Employees are free agents. They can and will move from job to job as their skills build and value increases. The revolving door is a reality in most organizations. Managers often focus on how quickly the door turns (how long people stay) and how many people pass through. Companies have tried many fixes to slow the exodus. Some of these perks are impressive and expensive. Examples include on-site concierge services, massage therapy, day care, subsidized meals and corporate health clubs.

If well conceived and implemented, these initiatives may help attract new employees and slow turnover. But perks often have a damaging effect, as well. Employees can easily develop a high sense of entitlement and a low sense of responsibility. They grow accustomed to being spoiled. Passion dwindles and creativity crumbles. The main reason for staying becomes the creature comforts.

By thinking outside the box, you can stop viewing short-termers as a problem. Instead, you’ll discover how to unleash the tremendous creative and productive power of short-term loyalty. The process is simple.

Step 1: Identify what value you provide
Don’t panic when you encounter high turnover. Be rational. Immediate, interim actions may be available to you—giving key employees pay raises and promotions, for example. But be aware that these traditional door-barring measures have limited value.

Trying to fight a well-established trend—job-hopping—often doesn’t pay off. The greatest gains actually occur when organizations stop fighting the inevitable and focus instead on maximizing the payback for the limited time they have people. To do this, you need to determine what you offer your short-term employees and why they choose to go elsewhere. The following series of questions will help.

Is your turnover in line with industry standards? How long do organizations like yours typically hold onto employees? If other organizations have significantly less turnover, what are they doing differently than yours? Either they’re offering something better—or you are. Look beyond money and perks. Instead, examine learning opportunities, challenge, excitement, chance for advancement and the like (the things that really make a difference at work).

Are employees able to learn and build skills? Ask your people: “What skills and experiences do we provide that will help build your career and make you employable elsewhere?”

What do your “graduates” tell you? Do you stay in contact with people who have moved on to other jobs? Former employees can provide invaluable information about what’s good, bad and different about other organizations.

What’s the real value-add you provide employees? When they leave your organization, what credentials have they added to their resumes? This is a particularly tough question to answer unless you are able to reframe turnover. Try to view a competitor as your customer, and your employees as a product that you deliver. What talents, knowledge, skills and abilities (the value proposition) have you wrapped around that employee?

Step 2: Market your niche to new hires
Now that you know what’s exceptional about the professional experience your organization provides, it’s time to pump up the volume. Define your niche (what you offer your new hires) and promote your value in the marketplace in ways visible to prospective employees. Believe it: You can brand your organization’s job experience just like the big-name advertisers brand products and services. This transformation can take many forms.

As an example, if a brief stint of employment with your firm provides people with the knowledge and skills to move on or out, you might position your organization as the “premier training ground” for those in a certain occupation. By reframing what you offer (a two-year training experience in field X), a world of possibilities opens up. There are many options.

Partner with the best schools, colleges and universities (those that most closely match your niche, while providing the right technical and interpersonal skills). Provide co-ops or internships. Offer to be a guest lecturer.

Rewrite your ads. “Are you looking for an incredible learning experience that will position you to...?” rather than “Entry-level person to blah, blah, blah.”

Promote your niche at every opportunity. Recreate what people see when they interview—focus on the true credentials you provide. Recreate, if need be, your visual environment—your office and organization as seen through the eyes of an outsider. If you’re really the premier training ground, make sure interview candidates see people passionately engaged in learning.

Expand your reach through new channels. Just as smart marketers push products or brands into new venues, so must you. The key: Ensure that the right message gets to the right people. Teach staff to talk about your niche and value proposition so that they can clearly communicate it to others and recruit good people. This is an instance where a policy or program can help. Remember that institutionalized programs must be well-conceived. Paying people for referrals may be money wasted. However, paying people to promote your organization’s unique attributes and provide the “right” kind of referral is money well spent.

Step 3: Streamline growth and development
Don’t ever let your short-timers stand still. To create short-term loyalty and enjoy its related benefits, you’ve got to maximize their ability to provide payback during the brief time that you have them. Here’s how.

Put ambition and energy to work. Many managers and long-term employees cringe when an overly enthusiastic newcomer wants to do it all. It’s natural to want them to do their time, prove their skills and learn the ropes before being turned loose. What we’re really saying is this: “You don’t have what it takes yet. Cool off and wait your turn.” If that’s the message your new hires get, it’s not surprising they look elsewhere for work. Gifted managers never extinguish an employee’s passion and energy. They know the best way to retain these lean, hungry rookies is to keep their plates full. Provide unlimited (that’s right, unlimited) opportunities for them to learn, advance and take on challenging assignments. Worried about the havoc they might create? Remember, mentoring, clear directions and frequent checkpoints are useful whenever ambition exceeds skill.

Improve training. Most new hires need training in some form or other. A radical streamlining of your training programs helps ensure quick productivity and maximum payback before your new hires head out the door. The best learning occurs on the job. Quick learning occurs when we experience new situations. If regular support and feedback are available to new employees, on-the-job learning can be an effective alternative to formal training programs. Put more bluntly: Your rookies can undergo a baptism by fire, if there’s somebody available to evaluate and treat the burns.

Establish clear and multiple paths to promotion. Provide people with clear career ladders that go up, down and across the organization. Be creative here. A single promotional path for everyone is too restrictive. How many ways can your people zigzag up the organization? Be clear about the stepping stones necessary for advancement.

Encourage, promote and pay for self-directed inquiry. Provide your people with a growth and development budget—a personal pot of money to be used on the topics of their choosing.

Show people their value. Our potential for giving praise and recognition is unlimited, yet many managers are stingy. Let people know frequently how much you appreciate their energy, talent and efforts to excel. Show each employee how they link to the bottom line. What measurable value does each member of your staff provide? Nearly 60 percent of employees agree that the best motivation is a manager who shows them how their jobs help the company make money.

Finally, tell ‘em what you’ve done for ‘em lately. Help people recognize the learning opportunities they have beyond formal training. Organizational life is a rich learning environment filled with countless opportunities to learn life’s most valuable lessons: how to deal with people, take risks, learn from failure and how not to always be the winner (just to name a few).

Step 4. Have an exit strategy
It’s important to recognize that anyone (including managers) who stays in the same position for too long can get stale. A manager adept at cultivating short-term loyalty and passion will also be able to detect when an employee’s energy starts to fizzle. Like it or not, people need to move on, and smart managers are able to help rather than hinder this process. Don’t allow employees to gather dust. Never stop asking these three questions:

  • What are you learning now?
  • What do you want to learn in the future?
  • Where are you headed?

Listen to the answers carefully. If an employee isn’t focused on growth and new challenges, it’s time for a big change. Either they have to go or you do.

The bottom line: Take talent any way you can get it. Managers should know that talent is a precious organizational resource. But it takes a gifted manager to recognize and use talent when it comes in a short-term package. If you understand the power of short-term loyalty and know how to unleash it, your organization will always have an endless supply of energy, ambition, skill and fresh ideas. The stuff miracles are made of.

This article has been abstracted from the author’s upcoming book, Miricles at Work: Seven Managerial Essentials for Unbelievable Performance.

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