In a tight labour market, employee retention is paramount

You’ll be telling yourself it’s money that’s making them leave for a competitor. And in some cases, that’ll be true.

A tight labour market drives up wages as organisations lure people away from their competitors with a bigger pay packet.

But when an employee loves their work, perceives they’re making a significant contribution, and feels understood and appreciated for their effort, the thought of working elsewhere won’t even enter their heads!

Retention has everything to do with leadership. Money is secondary.

And there’s a process to resign.  

It starts with disenfranchisement, leads to disengagement, and is swiftly followed by re-evaluation and exploration.  

In other words, people only start looking for new opportunities when their needs around workstyles are not being met.  

Take Katherine, for instance. In terms of workstyle preferences, she NEEDS a lot of autonomy. (We’re not talking about something she’d kind of like to have, this is a need, and we all seek to have our needs met, in one form or another).  

In Katherine’s case, she needs influence and control over her own activities. When Stefan was her boss, he got it. He’d throw out a challenge and let her figure out how to achieve the objective, managed with a simple weekly check-in so she could share her progress (he wasn’t checking up on her). She thrived.

But since Adeline stepped into the management role, Katherine has become frustrated.  Her every single decision has to be run by Adeline before she can take action. Each step has to be justified and explained.  Katherine feels like she’s suffocating. Adeline doesn’t know how to meet her workstyle needs and is managing her the same way she manages everyone: the way she herself likes to work – precise, double-checking, mitigating risk at every turn.

Katherine is disenfranchised with a job she used to love doing. She’s now doing just enough to keep out of trouble. But all that willing discretionary effort is gone. She’s choosing to disengage more and more, because she can no longer see the point in fighting.  

The past two years during the various lockdowns saw many people lose their jobs, and Katherine had too many financial obligations to risk leaving before. But now things are different.

She knows that it’s an employee market. For the first time since joining her company 5 years ago, she’s actively exploring her options.  

In a moment of insight, Katherine realises that had Stefan still been at the helm, she would never even be considering jumping ship. That makes her sad. But she’s not prepared to stay where she feels micromanaged – her talent wasted.

If you want to retain good people, the way you manage people matters…a LOT!

Knowing how to tailor your leadership style to meet the drives and needs of your team members is essential. Leadership is not a one-size-fits-all kind of thing.

Throwing more money at people is not the answer either!

Even if you could afford to match some of the salaries available in the current marketplace, people simply won’t stay where they feel misunderstood or unappreciated. You’d just be throwing good money after bad.

Great leaders “get” people.  

But not everyone is a natural leader. That’s where human analytics and behavioural science come in.  

You see, these two people need to be managed very differently:  

Person 1	Person 2

And the intuitive, natural leader may be able to figure out their different preferences after a month or two.

But the more reluctant leader will struggle with this problem for months – maybe even years.  

Unless they have access to the data.

Human analytics enables managers and turns them into great leaders.  

Leaders who are confident in their ability to customise their leadership style to meet the needs of the various individuals in their team. Leaders who leverage data to allow people to play to their strengths. Leaders who fuel engagement and a willingness to deliver more than is expected.

If you want to retain employees in this tight labour market, you need to look to your managers, not your purse strings.