I promise that this article will not become yet another about that virus, there are already plenty of those circling the internet. Suffice to say that it is an interesting time for workplaces and their leaders right now, one that will test our capabilities.
Instead, this article is about the importance of sustainable strategies that increase immunity against economic chaos. It was inspired from a recent conversation with a senior workplace leader that started with a simple question. What is your biggest people challenge right now?
The initial response was certainly thought-provoking…
“If you asked me that question just 2 months ago, I would have said attracting and retaining the best talent. But today, the thing I am most concerned about is how we attract and retain the best talent without creating unintended future consequences that come back and bite us hard”.
I will do my best to summarise the hour-long conversation into an article of suitable length.
The high cost of unsustainable benefits and perks
You can always tell when economic times are good. In job advertisements, you are likely to see offers of various benefits and perks that are meant to entice new team members to join. Pool tables, free lunches and massages, staff outings, the list goes on and on. There’s certainly nothing wrong with trying to attract the best talent to a workplace, afterall it’s one of the key factors for a successful workplace.
The thing we discussed was whether this is a sustainable strategy during chaotic economic times? What happens if the very things that attracted some people to the workplace had to be reduced or removed? What would be the reaction? To answer this question, my mind went back to a conference I attended during 2019, and a presentation about Behavioural Economics. Long story short, people tend to have a greater reaction to ‘losing’ something than gaining it in the first place. In other words, once something is considered to be ‘mine’, I attach a much higher price to it, moreso than before I claimed it as mine, as much as 10 times! This has a sobering impact on the use of perks and benefits. That free gym membership that doesn’t get used all of a sudden is worth many thousands of dollars more when it comes to taking it away. You are reducing my package by thousands of dollars!!
The crazy thing is that in almost all of the employee surveys we do with our customers (and we do a lot), perks and benefits rarely rate towards the top of the list (flexible working is an exception). But they are certainly important when they are taken away!
What’s an alternative?
When the movie Moneyball was released in 2011 (the one with Brad Pitt about how the Oakland Athletics managed to compete with well-funded teams by focusing on the basics), it inspired plenty of articles in the business world, especially in the area of recruitment. Personally, I have experienced this effect first-hand where the people with the highest price tag aren’t always the best to hire in the longer-term. Of course, during good times where unemployment rates are low, the focus is on attracting and retaining the best talent at whatever cost. Ironically, it is during these good times that a workplace should be thinking about contingency strategies. As sure as night follows day, economic cycles continue (the proof is currently all around us). The chances of things taking a turn for the worse when times are good will always be there.
So when it comes to attracting and retaining the best talent within a workplace, this creates a fundamental question:
Is our current strategy one that will continue to work in the longer-term?
And this is where the conversation that inspired this article reached an interesting point. Luckily for me, we at Optimum have been thinking about this question for a long time now. We have experimented a lot and have just released a series of innovations that help our customers to develop sustainable talent strategies. What we know is that it’s all about getting the basics right and establishing solid foundations including clear responsibilities, effective communication habits, and consistent standards. The best people to work with are often those who appreciate perks and benefits, but are motivated by being part of a great team that does great work. When everyone is succeeding together, everyone benefits. The best way we know (by a country mile) to achieve this is to establish effective recruitment processes, and solid workplace foundations. This is where you will find the tastiest return-on-investment to improve workplace performance.
For a conversation about how to future-proof your talent attraction and retention strategies, simply get in touch with us here at Optimum.
Jason Buchanan – General Manager, Insights & Innovation