The following blog post was co-authored by eQ's Chris Steer and Jeff Lesher
The claim that “our people are our most important asset” states the obvious, but fails to reveal if your people are actually your most valued asset. As a general rule, we know we want to treat people we value well. As employers – investors in people – we often miss the mark when it comes to how we reward our people through our total compensation plan (salary, commissions, bonuses, benefits, training and professional opportunities, and more).
The cause of poor investment choices and poor returns usually occurs because:
You don’t know what your people value, or to the extent they value it, and
You don’t control the narrative of rewards, ensuring people understand what they receive
As an employee, or someone being recruited, you can help employers gain the clarity they need to best attract and retain the right people (valued assets) for their organization in part by investing in the right rewards. There are fairly scientific ways to have populations force rank all aspects of the rewards offered by an employer. However, merely stating you’re buying what the employer is selling will go a long way to avoid misunderstandings and missed opportunities on both sides. Towers Watson’s 2014 Global Talent Management and Rewards Study found employers are finding it difficult to get, and keep, key talent; including top performers and high-potential employees because employers do not always understand the rewards workers value most, which can make it difficult to develop a winning employment deal.
There is a related economic impact to these misunderstandings that can thwart a relationship from the start or lead to disenchantment and, worse, disengagement of employees. Reality check warning: as the world of work becomes more contingent-based and the chasm between the highly skilled and the less skilled worker grows, the challenge in attracting top people will get harder for leaders and their organizations. The good news is creating so-called highly evolved deals (rewards packages, opportunities, and enhanced management and support systems); employers can significantly reduce their difficulty in attracting retaining employees with the skills critical to their business. Put another way, in order for you to succeed, you need to make developing and maintaining the right rewards package a priority.
We like to encourage employers to view themselves as investors and employees as assets. Investors invest wisely in the right assets in order to generate returns. Given the imperative nature of better aligning your rewards with your people, here are some primary ways in which all parties can do better:
Investors:
You need to know what the market is. When it comes to the asset of talent, you need to define what the best talent is for you and understand the investment necessary to obtain and retain it. In the talent space, to a large extent, you get what you pay for … and you don’t necessarily get what you want just because you pay for it.
Know your own talent brand. What do existing and former assets say about you and your rewards structure? Should you reevaluate it? Are you too close to assess it objectively? Assets are in control, after all, as top talent often bargains from a position of strength. Be sure you can articulate a clear purpose and a rewards structure that is attractive to the people who are right for you.
Be bold when it comes to people. To paraphrase Seth Godin, it’s unreasonable to think you’ll find great people if you’re spending the minimum amount of money necessary to find people who are merely good enough. Building an extraordinary organization takes guts and more.
Assets:Know your value and what you value. If compensation is made up of more than just base salary, make sure you understand how bonuses are earned – including your control of the criteria and some sense of the success rate in the prior couple of years.
Perform your due diligence. Due diligence is not only the sword of the investor but also of the asset. It is your responsibility to know if your individual purpose aligns with the investor. Make sure you have a clear understanding from the start of the full compensation, benefits, and development array.
Pride before the fall. While an asset equipped with the knowledge of her worth is powerful, it is always prudent to maintain a measure of humility, as that characteristic is fundamental to continued growth and learning. We believe the best people are always about permanent beta … and to be in a state of continuous development, growth, and aspiration, you can’t believe you’re all that.
For assets and investors alike, success is derived through good fit, engagement, and appropriate longevity. Employers need to determine the level of investment that makes sense for their business, including what it takes to attract the right people. Prospective employees need to identify and weigh the components of an opportunity.
Employers benefit from keeping it real – realistic job previews (and general candor) are shown to increase retention between six and nine percent. With the cost of refilling roles set at anywhere between 1.5 and 3 times the value of salary and benefits, that can result in big time savings.
Prospective employees have to be honest with themselves … don’t sell yourself a bill of goods. The fiction of an imagined good fit or tolerable misalignment will not last, and you and others will suffer. In the reverse case where prospective employees are willing to take less money or a role that seems to be a step backward because they understand the fit, they may need to help the employer understand … sell them, in fact … on how and why the opportunity is right for them.
When both parties play an active role in looking out for themselves by looking out for each other, everyone wins.
