March 2015

Turnover and retention are hot-button topics in today's economy. With costly turnover eating into bottom lines, more and more businesses are recognizing the value in implementing formalized retention programs. Unfortunately, many businesses overlook a key tool in their arsenal to reduce turnover - employee development. Retention isn't just about offering more money and financial benefits - non-cash reward programs can play a critical role in keeping and cultivating talent.

When More Money Just Isn't Enough

In 2008-2009, Princeton researchers Daniel Kahneman and Angus Deaton analyzed data relative to annual income and emotional well-being. These researchers found a surprising revelation: for employees earning above $75,000, a higher annual income didn't provide more day-to-day happiness.

For employers, this correlation offers an important insight: beyond a certain amount of abstract satisfaction, employees do not work harder or become more invested in the company after their salary satisfaction threshold is reached. In other words, raises and bonuses offer diminishing returns, so employers must look to other options to keep employees engaged and motivated.

Employee development is an often-overlooked tool for keeping employees satisfied, reducing turnover and enhancing retention.

How Employee Development Turned an "I Quit" into an Invested Leader

In Boston, employee development recently turned an "I quit" into an invested leader at a growing company. This individual had become increasingly frustrated at work, and had voiced constructive options to address key business issues on numerous occasions. Over a period of several months, he became more and more frustrated, until eventually, he looked for and found another job.

What he didn't realize - because his employer hadn't communicated it - was that the company was already in the midst of implementing his feedback. Management had begun to implement new systems and processes based on the employee's ideas and suggestions, and had also begun to take steps to improve overall morale.

When his employer found out he wanted to leave, they offered him more money. This didn't work; it wasn't the money the employee was unhappy about, and he was already making enough money to maximize his day-to-day happiness. After asking him what they could do to get him to stay, and after some discussion, the owners made him manager of a team of employees, and they acknowledged how much his vision was helping to shape the company.

It wasn't more money that turned the "I quit"around - it was communication about how much the company relied upon and appreciated this individual, and providing him an opportunity to play a bigger role in helping to shape the company's processes and strategies going forward.

What Does Employee Development Mean?

Employee development isn't just about giving someone a promotion, or an annual review - it's a combination of factors, including:

Conducting regular communication about employee performance: Annual reviews are common practice, but employee performance isn't something you should discuss once a year. Conduct regular meetings to discuss performance expectations and opportunities for improvement; provide feedback when employees are doing well and reinforce positive morale when appropriate.
Helping employees develop new skills: Both internal and external training play a role in helping employees develop new skills. This can be a win/win when new skills make an employee more efficient or capable of meeting new challenges, or prepare employees for new roles.
Nurturing career progression: Offering career progression opportunities to existing employees is a valuable tool to boost engagement and employee investment, while at the same time providing an experienced pool of talent for recruitment.
Soliciting feedback to foster talents: Managers don't always spot skills and talents in their employees, so soliciting feedback from peers, other managers and even customers can highlight an up-and-coming performer, and provide new development opportunities for employees.

It's not uncommon for companies to fall short in one or more of these areas. However, with the right guidance, it's easy to implement more effective employee development solutions.

Let Expert Access Help with Your Employee Development Needs

Expert Access stands ready to help you evaluate and optimize your existing employee development programs, as well as develop new ones. Whether you're looking for help with:

Coaching
Mentoring
Training
Employee loyalty programs

Or other employee development needs, our expert consultants can help your company retain and develop talent and reduce costly turnover. When you invest in employees and help them grow, it isn't just the employees who benefit - your company will enjoy the success that comes from turning top talent into engaged visionaries and tomorrow's leaders. Call us now for a complimentary consultation.

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