When it comes to the world of recruitment, the tables have turned and times have changed. With unemployment at record lows, we now live in an employee’s market. Candidates — especially those with niche skills and records of high performance — hold all the cards.
At times like these, we need to pay particular attention to our retention efforts. The more talented employees we can keep on board, the less we’ll have to worry about battling it out in a tight talent market.
So it’s time to take a step back and ask: Why do employees stay? Why do they choose to remain at your company when they could jump ship to a competitor? Is a large pay packet all it takes, or are modern employees looking for something more?
Why Employees Really Stay
A recent employee retention study from People Insight, conducted in the form of a multiple linear regression analysis, attempted to get to the bottom of why employees remain at an organization for the long haul. The regression analysis looked at more than 4,000 responses across 130,000 data points to determine what employee engagement factors had the most significant effect on the following sentence: “I’d like to still be working here in two years’ time.”
Rather than increased pay, extrinsic perks, or even training and development, the clear winner and leading reason why employees choose to remain turns out to be company purpose.
Employees are seeking fulfillment and meaning in their careers. They don’t want to simply turn up, get their work done, and leave. They want to know what they do matters and that they are making a difference. For this to happen, employees need three things:
- They need to know and understand your company purpose.
- They need to feel aligned with this company purpose.
- They need a company culture that emphasizes the importance of that purpose at all times, reinforcing it through communication, reward, recognition, retention, and recruitment.
Understanding Your Company’s Purpose
So, what exactly is company purpose? It’s important to note that a company’s purpose should be about far more than just making money; such an aim is unlikely to inspire and retain your employees. Instead, your company’s purpose should be a clear and simple statement about what your organization stands for, where it wants to go, and how it wants to get there. Your company purpose should be at the core of what you do, and it should guide all business decisions.
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This might sound like a lot to accomplish in one or two short sentences, but if you have a real grasp of your company, putting this sentiment into words should be easier than you might think. Here are a few examples of other companies succinctly and clear outlining their purposes:
- Innocent: “Make it easy for people to do themselves some good.”
- Facebook: “Bring the world closer together.”
- TED: “Spread ideas.”
- Walt Disney Company: “Entertain, inform, and inspire people.”
- Tesla: “Accelerate the world’s transition to sustainable energy.”
It might seem odd that company purpose would motivate an employee to stay more than, for example, better pay. But our study isn’t the only one to reach this conclusion. For example, a 2016 Cone Communications study found 75 percent of millennials would take a pay cut to work for a socially responsible company. Likewise, a 2018 BetterUp survey found 90 percent of people are willing to earn less money to do more meaningful work. It’s clear: Employees want to be part of something.
As Graham Kenny of Strategic Factors writes in Harvard Business Review, “[Purpose] is motivational because it connects with the heart as well as the head.”
How to Engage Employees With Company Purpose
Knowing the importance of company purpose is one thing, but putting it to use is something else entirely. You need to make sure your employees understand your company purpose, and you should actively take measures to align employees with the purpose. This isn’t a tick-box exercise or one-off task; you need to continually use your company purpose as a motivator and keep it fresh in the minds of your employees.
Begin by communicating your purpose clearly. Make sure it’s visible and understood. Some companies put their values on the office walls, some print them on the stationery, and others post them on their websites.
Next, you need to make sure you use your purpose to guide every business decision you make. When you hire someone, make sure they are aware of — and motivated by — your company’s purpose. When you promote an employee, make sure they are actively working to further company purpose. Reward and recognize employees who genuinely understand the company purpose and personify it at work.
Leadership is vital when it comes to establishing and communicating purpose. What your leaders do matters. When employees see their leaders use company purpose to drive their actions and decisions, they will follow suit. If leaders are apathetic about the company’s purpose, employees will be equally disinterested.
Recruit With Purpose
The power of company purpose has obvious implications for recruitment. If you want to retain employees, you need to start by recruiting employees who align with your purpose. No matter how skilled an employee is, they aren’t going to stick around for long if they aren’t genuinely inspired by what your company stands for.
Make the effort to clearly articulate your purpose throughout the recruitment process. Let prospective employees know what they are in for. Give them a taste of your company’s culture and values. That will help ensure that the candidates you hire are candidates who will remain with you long into the future.
Carolyn Nevitte is HR director at People Insight.