Organizations take great pains to recruit, select and develop world-class employees and are rightly concerned when these employees leave. Thus, most managers would like to know how to improve the probability of retaining talented people.
My recommendation is this. Instead of thinking about what causes people to leave, focus instead on what causes them to stay. In failing to distinguish between behaviors or policies that trigger defection and those that encourage retention, companies risk taking ineffective approaches to holding on to their best performers. For instance, while some employees may leave an organization to get a larger paycheck at another, that doesn’t necessarily mean that the organization should focus exclusively on pay to keep valued workers. Together with my colleagues Terence R. Mitchell and Thomas W. Lee (both from the University of Washington), I have developed the concept of job embeddedness. The simple logic is that the more embedded a person is in her job, the less likely she is to leave it. Over the past decade we have conducted research in many industries, including banking, health care, and retail. In each setting, we found that job embeddedness did a better job of explaining retention than job satisfaction and organizational commitment combined.
There are three interdependent aspects to job embeddedness, each of which applies both to the organization itself and to the surrounding community in which the person lives and works:
1 Fit: An employee perceives herself as compatible and comfortable with the organization and the surrounding community. For example, she believes that her employer shares her values and that her knowledge and skills match the demands of her job. She also feels a sense of belonging to the community in which the company is located.
2 Links: An employee has strong, positive connections with other people in the organization and with people and groups in the community.
3 Sacrifice: An employee believes that leaving the organization and the community would require giving up many things she values, such as interesting projects, rewarding professional relationships, and a rich, meaningful social life outside work.
The closer the fit between the employee and her organization and community, the stronger the links she feels to her company and to her community, and the greater the potential sacrifice of leaving both, the more “embedded” the person is in her job—and the less likely it is that she will defect. Not only does embeddedness enhance retention, but it also has a positive impact on performance. In research sponsored by and conducted at Citibank, we found that employees who were more embedded in the organization demonstrated a higher in-role performance (they satisfactorily fulfilled job duties) and extra-role performance (they routinely went above and beyond their job description).
So, what can managers do? Following are a few ideas flowing out of our research:
1-Provide employees with information about community activities and resources.
2-Offer perks based on tenure.
3-Let employees design their work environment and company celebrations.
4-Encourage your direct reports to publicly recognize one another’s on-the-job achievements.
5-Let people choose which teams or projects they want to join.
6-Invite employees’ input into decisions that directly affect them.
7-Encourage knowledge and best-practice sharing among your staff members.
8-Sponsor parenting networks for current and former employees.
9-Create on-site child-care or exercise facilities.
10-Involve employees in developing schedules that fit their needs, whether that’s full-time or part-time status or specific shifts.
Brooks Holtom, Ph.D., Professor, McDonough School of Business