Last weekend, my kids and I hopped into the car to pick up dinner. We were looking forward to visiting our favorite local spot, and hadn’t had the time to get there over the past few weeks. But when we pulled up to the storefront, the sign on the door noted that the store’s hours had changed: “Due to staffing shortages, we will now be closing at 5pm.”
You may have seen similar signs in your neighborhood. Restaurants shutting down a few days per week. Empty aisles at convenience stores because of staffing shortages in the supply chain. Or the array of “We’re hiring!” announcements all over town. There is a talent scarcity, and businesses are taking drastic measures to find the right employees.
It’s commonly accepted wisdom that customers are the most important part of a company’s success, but companies are overlooking the fact that it’s our employees who are the backbone of our organization. Now that the war for talent is fierce, companies are finally making changes to cater to employee satisfaction. Companies like Costco and McDonalds are raising their pay scales. Amazon has offered full tuition reimbursement to its frontline employees. We’ve seen more and more offices offer long-term hybrid and remote work environments or flexible schedules to help their employees balance work, family, and health.
Why is it that radical changes like these only happen when the demand for talent extends far beyond the supply? To win in the long run, an attractive culture and delighted employees are critical assets for any business’ success and survival.
Avoiding “shiny object syndrome”
In my workshops, I walk participants through a business model analysis referred to as “The 8 Ps”: positioning, product, pricing, placement, promotion, physical experience, processes, people. These eight essential dimensions are full of opportunities to set yourself apart from your competitors.
I leave “people” for last, not because it is the least important, but for the opposite reason. The leading research in innovation has identified people-focused policies—who you hire, how you organize them, your incentive system, and your internal culture—as the most important factors in whether your innovation efforts succeed or fail.
In a recent podcast interview, I spoke to Dave Ulrich, codirector of the University of Michigan’s Human Resource Executive Program and one of the most influential thought leaders in the area of HR, about what it really takes to attract and keep top talent.
He said, “In human resources, we love the latest shiny object.” We think of colorful offices with ping-pong tables, happy hours, and free snacks. “Look beyond [the latest shiny object]. It’s not about a fad. It’s about an underlying principle that creates a pattern. Hybrid work means how do we help employees stay engaged at work? That’s not a fad, that’s a pattern. What are the fundamental principles that drive sustainable change?”
As the war for talent gets fierce, most companies look around to spot the trends in what everyone else is doing, but the factors that impact employee satisfaction are timeless.
What keeps employees happy and motivated?
Frederick Reichheld told us that the number one predictor of top-line growth can be discovered by asking your employees: “Would you recommend this company to a friend?” Fulfilled employees will be thrilled to talk about their place of work. They’ll put their reputation on the line by recommending the company to friends. So, what are the factors that will keep employees satisfied in the long term?
In Primed to Perform, authors Lindsay McGregor and Neel Doshi share how companies build the highest-performing cultures through “total motivation,” or ToMo. It’s a simple theory based on the idea that people work best when you figure out why they work.
Lindsay shared with me six reasons why people work, three leading to higher performance and three leading to lower performance, and how you can measure and manage all six.
Motives that work in the long term
- Play: You do the work simply because you enjoy the activity. Think of it as being in the “zone” or the “flow” where you hardly notice time passing.
- Purpose: You work because you care about the direct outcome—whether it’s helping to solve a customer challenge or develop a new product.
- Potential: This is more related to indirect outcomes. Your job may be a stepping stone to another role or it may help you to develop a necessary skill.
Ineffective, short-term motives
- Emotional Pressure: Stringent cultures with a lot of rules in place attempt to use emotional pressure. Guilt, shame, or peer pressure may keep employees in line, but these emotions won’t motivate people in the long run.
- Economic Pressure: Offering financial incentives is a popular way to attract immediate new talent, but to retain employees, you will need a culture that appeals to the first three motives.
- Inertia: This is when employees stay because it takes energy to leave. They stay in a job because they’ve always been there, even though it may no longer be a good fit.
These last three motives can be tricky because they appear to work in the short-term—raising pay rates to bring in top candidates, setting up strict rules that employees are required to follow, or keeping seasoned employees around—but it’s your total motivation score (high play, purpose, and potential combined with low emotional and economic pressures and inertia) that will help you build a positive culture that lasts.
Learn to look beyond the latest fads and external motivators to discover what really motivates your employees and attracts new hires.
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