As anyone in recruiting will tell you today, hiring is tough. The competition for candidates is fierce, as evidenced by a Conference Board survey that found one-third of senior leaders believe finding talent is their most significant managerial challenge
It stands to reason, then, that companies should be investing heavily in retention efforts. The more top-tier talent you retain, the less time and money you’ll have to spend battling it out in the talent market. With the staggering cost of turnover being 90-200 percent of the departing employee’s salary, companies can’t afford not to prioritize retention.
One key to retention is robust performance management. According to Gallup, employees who “received strengths feedback had turnover rates that were 14.9 percent lower than for employees who received no feedback.”
Yet businesses are often slow to prioritize employee development. In fact, in another Gallup survey, 47 percent of respondents said they received feedback from their managers just a few times a year or less, despite very strong high demand for it.
At MessageBird, we’ve been embarking on our own quest to keep employees engaged and retained through continuous performance management practices. Here are three key lessons we’ve learned so far — which we hope other organizations can use to get their own performance management processes in place:
1. Start Now
Anyone who has experienced startup life firsthand knows there are times when it feels as though everything is moving at warp speed. That’s certainly the rate things have been moving at MessageBird for the last 18 months. We increased our employee base by more than 100 percent — but without all the necessary processes in place, this growth created a less-than-ideal experience for our new hires.
It’s difficult to call that hiring frenzy a mistake because we learned so much from it. Most notably, we learned that you can’t put performance feedback on hold until you have everything “ironed out.” The pace of business today is too fast to wait for the perfect time to implement performance feedback. The perfect time is not likely to come, so you might as well start now.
2. You Don’t Need to Have All the Answers
There’s a reason many businesses list “dealing with ambiguity” as a core competency employees should exhibit. As much as we’d love to have it all figured out, every business faces detours, roadblocks, or even radically new paths. Priorities will often change based on the needs of your customer base.
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We’ve learned you don’t have to have all the answers before setting short-term goals for employees and providing feedback on progress toward those goals. Everyone wants to know what success looks like in their role, and having goals to work toward helps team members measure their performance beyond the simple execution of daily tasks. When priorities shift, having a more continuous feedback process in place helps employees work through the transition and adjust their goals accordingly.
It is also important to remember that communicating nothing communicates more than you think. In fact, when you communicate too little, employees have a tendency to fill in the blanks with information that’s often inaccurate. That’s why we hold monthly all-hands meetings to share information and address questions. During these meetings, we bring the team together to share project updates and zoom in on a critical area or two. At the end of every meeting, we have a Q&A session so employees can ask questions and hear from leadership. While we don’t always have all the answers, we can create open dialogues, facilitate the sharing of ideas, and prevent our employers from assuming the worst.
3. Feedback Should Never Be a Surprise — and It Should Always Be a Two-Way Street
When it comes to performance feedback, I’ve encountered very few employees who like surprises. That’s why we encourage managers to hold weekly one-on-one meetings with their team members and share course corrections regularly. Regular check-ins are more efficient, as the sooner feedback is offered, the sooner an employee can act on it to improve their performance.
Perhaps most importantly of all, your employees shouldn’t be the only ones getting feedback. According to Deloitte, employees value an environment of listening. They want to offer their own feedback to the company, and they want to know the company will seriously consider their input and act on it when warranted.
Even the most well-intentioned constructive feedback can be hard to hear, and it’s no different for the leaders of an organization. It’s tempting to surround yourself with people who only share the good news, but when you’re the leader, you need to be able to face feedback.
When it comes to retention, few things are as powerful as regular feedback and a strong performance management process. Establishing two-way communication between employees and their leaders can make employees feel heard, valued, and invested in. That, in turn, makes them less likely to leave — and you can spend less time in the fierce talent market.
Mayke Nagtegaal is COO of MessageBird.