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After working for several companies with varying degrees of formal policies, both written and implemented, I have some ideas about policies that employers should consider in order to prevent their best talent from fleeing.
- Don’t limit salary increases. Putting a cap, like 12% on any salary increases, deters employees from staying and growing in your company. First, if your employee could go next door and get paid a greater amount because she doesn’t have a 12% limit holding her back, why would she stay with your company? Second, there’s a problem with the policy if an employee has a better chance at having a fair negotiation if she resigns and then applies as an external candidate. Salary increase caps favor external candidates at the expense of internal ones. Shouldn’t it be the other way around, creating policies that support internal talent as a way of acknowledging their loyalty?
- Build in perks that increase in value for employees who stay beyond certain milestones. If you’re interested in keeping your company competitive, there are many ways to enhance perks offered in exchange for employee loyalty. Maybe the employer contribution to employees’ retirement accounts grows with each year that passes? Or maybe paid time off packages become more generous after 2 years, and then 4 years, and so on. There are countless ways to do this. However, it is important that there are perks with increasing value for all employees, not just the executive ones. While it is tempting to offer tailored and competitive perks to executives, don’t forget about the employees at the bottom of the organizational chart who make sure your business operates as seamlessly as possible. If keeping the good employees (no matter the role) at your company saves you money in the long run, it makes good financial sense to invest in their loyalty.
- Offer merit based salary increases based on the achievement of clearly defined goals. Merit based increases tell an employee that you are seeing her successes and valuing them. Merit based pay could keep employees in the right roles, instead of them choosing to change roles in order to make more money. Not everyone wants to manage. Further, it’s important that if an employee finds her right role and she is satisfied, she should be able to grow within that role, and be recognized for good work through appropriate compensation.
What do you think? Share with us the comments below.