The Real Way Companies Attract and Retain Talent

Two years ago, a CEO I work for got a call. It was a key employee from a competitor, asking for a job. This employee hadn’t been fired and the CEO hadn’t solicited. When the CEO asked why he wanted to come over, the key employee gave an answer that stuck with me ever since.

What would you guess the answer was? What would cause you to leave a high-level job and go over to a competitor?

Higher Pay?

I don't think I’ve ever truly left a place for higher pay. Maybe you have. 

The big problem with “higher pay” is it's hard to calculate. You need to consider these 11 things, at a minimum:

1. Base pay.
2. The number of hours worked. This question applies equally to salary and hourly.
3. Vacation. How much? Can it be paid in cash? Does the role realistically allow time for vacation?
4. Retirement plan (at least in the USA). Is there a retirement program? Do you have to defer some of your own pay to gain a benefit? Will you actually use the program?
5. Health insurance (again, at least USA). What are the deductibles? What is covered? What is your contribution?
6. Bonuses. Is there a bonus/profit sharing plan? Is there a long history of sizable Christmas bonuses?
7. Pay increases. Are they based on a nominal growth rate (e.g. 3%) or if you truly excel, might you see a 20% increase?
8. Training/continuing education opportunities.
9. Travel arrangements. How do you get paid for travel time and cost? Are there daily per diems, etc?
10. Commuting time and cost.  
11. Type of experience you are gaining. Harold Geneen accurately observed: "In the business world, everyone is paid in two coins: cash and experience. Take the experience first; the cash will come later."

It's hard to compare pay, and people who leave for pay may not be considering all the factors.

Intangible benefits? 

Would you leave your current job for better intangible benefits?

In unique circumstances, for sure. If you’re taking care of your elderly mother and need flexible hours, you might switch to a company that lets you work from home. 

Would you switch to a company that flew you first class and put you up in 5-star hotels? Would you switch to a company that let you work remotely? Would you switch for a really big office with nice windows?

Some of these points might actually have more appeal than pay. Ultimately though, I don't think benefits are the all-consuming key to attracting and retaining talent.

Being part of a greater purpose?

This is another strong contender. I’d guess there are millions of people currently employed in a cause they believe in. Nonprofits and startups benefit from this driver.

But what if you are John’s Plumbing, or Waste Management, Inc., or the Internal Revenue Service? There’s got to be a way to attract and retain talent without an ostensibly noble cause.

We’re looking for a key that fits even boring, landlocked organizations.

The Key

Here’s what the competitor’s employee told the CEO:

“I know you from other places, and I know that when you’re involved, things go forward, not backward.”

That's it. This key employee didn't come in through a billboard ad, a radio blitz, or a sign in the front yard. He didn't hear anything about pay. He didn’t come dreaming about a great cause. He came to a very traditional work place where “things go forward.”

Employees have an uncanny sense of what I’ll call “progressive energy” (I got that phrase from another owner I work for). It captures the point. 

A place with “progressive energy”:

1. Is truly open to new ideas and practical suggestions.
2. Is a meritocracy.
3. Is visibly changing and truly improving. Examples include new logos, updated equipment, better parking lots, remodeled clean bathrooms, and more pizza.
4. Has an atmosphere of respect and honor.
5. Is more level than hierarchical, but has extremely effective leadership.
6. Feels like a place you can call home.

Even customers and vendors sense it. Progressive energy is the perfect trifecta where employees want to work for you, customers want to buy from you, and vendors are ready to do about anything to get your business. 

It's also admittedly elusive. Unfortunately, sometimes progressive energy derives heavily from leader charisma. Sometimes it rests on unstable intangible factors. I'm sure WeWork employees know what I mean on both points.

Progressive energy is also admittedly derived in part from good pay, intangible benefits, and being part of a greater cause. However, it is not simply the logical sum of those three factors. It’s something bigger. It's something you know when you see.

Maybe what I'm really trying to say is that the best employment advertising is free. You can pour thousands into ads that will keep your revolving door full of candidates. Or, you can put thought and care into grooming your company into a place with progressive energy and that attractive "can-do" spirit. Everyone loves to be part of something that works, and when you achieve that reputation, you've crossed the most important hurdle in attracting and retaining talent.

Next time you're wondering where all the good help is, remember this: “I know you from other places, and I know that when you’re involved, things go forward, not backward.”