Attract and Keep A-Players with Nonfinancial Rewards
Attracting and retaining top talent are perennial concerns among managers, in good times and in bad. With salaries frozen even as the scope of work expands, managers find it nearly impossible to lure A-players and compensate existing high performers without breaking the budget. The good news? They may not have to.
According to the Center for Talent Innovation (CTI), money is not the major motivator among college-educated workers. While raises or bonuses are not unimportant, especially in this uncertain financial climate, recent CTI data shows that workers across a spectrum of ages — from Baby Boomers who have worked hard to reach the peaks of their career, to Generation X'ers struggling to satisfy professional ambitions and personal fulfillment, to Millennials who view work/life balance as their right — are looking for a remix of conventional rewards. Many of these don't cost a dime but pay off in increased engagement, loyalty, and willingness to go the extra mile. For example, when surveyed about the possibility of working remotely, 83% of Millennials and 75% of Boomers say that the freedom to choose when and where they work motivates them to give 110%.
When the rewards remix is recalculated, three nonfinancial offerings rank equal to or higher than compensation.
1. Everyone wants flex. If there's one work perk that rises above the rest, it's flexible work arrangements. According to CTI research, 87% of Boomers, 79% of Gen X'ers, and 89% of Millennials cite flex as important.
Companies that treat time as currency — through remote work options, staggered hours, and reduced-hour arrangements — are also more likely to attract and retain high-caliber employees. Work/life balance has always been prized by working women juggling the demands of family and high-powered jobs, and now these moms are being seconded by incoming Millennials, who consider it a basic entitlement to play as hard as they work, as well as Gen X dads. One such dad commented in a CTI focus group, "I'm the primary breadwinner, so I can't take time off now. But in looking for a new job, a role with flexibility will be my top choice."
Staggered hours and telecommuting are a huge hit in emerging markets, too. In many major cities in Brazil, China, and India, rush hour turns the traffic-clogged roads into cacophonous parking lots and commutes into stress-inducing ordeals. In the CTI report "The Battle for Female Talent in China," one Beijing executive estimates that working from home would add two hours of work time to her day. In fact, two years after HSBC launched its Flexible Work Arrangement in India, productivity had shot up in 88% of the participants and not declined in the others.
2. Recognition resonates. Thirty-five percent of workers and 30% of chief financial officers in an Accountemps poll cited frequent recognition of accomplishments as the most effective nonmonetary reward. Thanking people for their hard work and commitment is the key to making them feel appreciated.
"Because few people expect much in the way of reward these days, a small but personalized thank-you can have a big impact," says Steve Richardson, founder of Diverse Outcomes and former chief talent officer for American Express. "Even when I send a recognition note to a big group or team, I try to add a personalized paragraph in each person's email, so it's highly tailored to the individual."
Public recognition is also a powerful tool that doesn't cost money but can reap a huge return. Writing about an individual or a team on the company's intranet or showcasing their accomplishments at a town hall meeting can have a big impact.
A senior executive spending personal time with an employee is another popular reward. "Being taken to lunch or breakfast by the boss once in a while not only shows appreciation but interest," says one CTI interviewee.
Just be sure not to devalue your appreciation with over-enthusiasm. A thank-you makes the biggest impact if it is heartfelt, not just token.
3. Take a break. In a climate where most people who have a job are doing their utmost to keep it, few feel they can afford to take a break during the day, even though studies repeatedly show that productivity goes up from just a brisk five- to ten-minute walk. Managers can help shatter the imperative of face time by setting an example: Take time out during the day to go to the gym, and encourage employees to take advantage of the company's wellness programs. One manager schedules a ten-minute break after a weekly afternoon meeting. All are encouraged to get their mind into a different mode, however briefly, before returning to their desk.
Enhanced compensation — even when it's possible — is no longer enough to motivate high performers. Instead, companies looking to get the best talent money can't buy should invest in meaningful nonmonetary rewards.
What are some of the solutions that have worked for you? We're eager to know.