I’ve always stated that while cash compensation and benefits might be the largest factors for attracting talent, they are by no means the factors for which employees stay with the organization. In order to have high employee retention you have to have great employee engagement and a solid employer brand (or employee value proposition).
Looks like times are changing and I might be wrong.
Sean Rehder of Talent Ecology directs us to an article published in Management Issues. The title of the article boldly states that “culture and reputation count more than money in the war for talent.” Unfortunately, Management Issues and author Nic Paton don’t do a great job convincing me (and I was ready to believe before I even started reading).
An international survey of more than 500 HR executives by global talent management firm, Bernard Hodes, has found that the quality or reputation of products and services, the corporate culture and the work environment were a business’s most important attributes when it came to bringing talent aboard.
Ethical reputation also scored highly. But benefits and compensation were, perhaps surprisingly, bottom of the list. ((Paton, Nic, August, 31, 2006. “Culture and reputation count more than money in the war for talent.” Retrieved from Management Issues on October 28, 2006.))
If the Bernard Hodes survey had stated that compensation and benefits were ranged just below the employer reputation in factors that influence the job seeker’s decision, I’d believe it. However, I think we all intuitively know that few people look for a job based on reputation with selfless disregard for their own situation. So yes, basically I’m calling the Hodes survey crap in the light of significant other research that says comp and benefits are still leading attractors, but that those become less important the longer employees stay with an organization.
Looks like times are not changing – I’m not admitting I’m wrong yet.
4 responses to “Attraction versus Retention”
[…] Attraction versus Retention systematicHR – Human Resources Strategy and Human Resources… I’ve always stated that while cash compensation and benefits might be the largest factors for attracting talent, they are by no means the factors for which employees stay with the organization. In order to have high employee retention you have to have great employee engagement and a solid employer brand (or employee value proposition). … By systematicHR Tags: branding talent acquisition talent management engagement hr hcm E-mail | PDF | Save | Blog this! | Related stories: | Bookmark: | Follow: 12/14/2006 03:46:32 AM […]
I was recently writing about employee retention and as a software developer, I can tell you than financial compensation is important no matter how good the culture is. Also, a perspective employee can only guess at the true company culture unless you’re extremely well known (like Google, for example) and they know it. They may not take the highest paying job they’re offered, but it has to be close.
Once they’re “in”, financial becomes less important and the fun of the job is what keeps them.
While I can’t speak to the technical validity of the Hodes survey the results aren’t as counter-intuitive as you might think. Yes, when asked why they work, according to SHRM research, most will rank pay and benefits as their top two drivers. And if I ask you why you eat, you’ll probably mention hunger. In both cases, there’s no surprise that the base need is identified as the primary motivator. But given that the business of attraction is so heavily directed toward the passive candidate–the candidate who, by definition, is already working at a job s/he finds satisfying–there’s a fundamental problem with both the question and with the premise of your argument. It’s not “why do you work,” but “why do you do your best work” that we need to understand. This “best work,” whether it be coming in early and staying late to complete a task on time; spending extra thought or effort on a process to get it just right; taking personal accountability for the customer’s experience of a brand, is more than a gift individuals may choose to give or withhold: it’s what separates the outstanding organization from the ordinary. In all the research my agency (TMP Worldwide) has conducted–and we’ve done this around the globe in virtually every sector–while the answer varies, it is never pay or benefits.
Thanks David. That’s very insightful. Your comment, “It’s not “why do you work,” but “why do you do your best work” that we need to understand.” leads me to thinking about engagement – another topic I write about frequently. The best work we produce and staying that extra hour is the sign of an engaged employee. Certainly there would and should be different attractors for that level of commitment from an employee.
I do think though, that once you have engaged employees, the answers for “why do you work here” and why do you stay here” change – and that these answers may differ significantly for engaged and non-engaged employees. I also admit that the target group of employees any organization is trying to keep engaged is probably fairly small – senior talent and management.
So perhaps I’ve been trying to match the “answers” that are in my head with the wrong questions. I’ll keep thinking about it.