Why reward professionals need to consider all stages of the employee lifecycle
Thinking of the employee experience at work as a lifecycle with different touch points, there are times when employees cost the business money as well as points where they generate a return. At the start of the lifecycle, during recruitment, the output is negative as they consume resources but are not yet contributing. However, as they become competent in their role, they progress to the point of fully contributing and adding value to the business. At some point, however, they may decide to leave and consider other job options – generally after this point their productivity starts to decline and on their last day their output is at zero.
The challenge we face is how to raise the bar and extend and maximize Employee Lifetime Value. By looking at the ways we can shorten the ramp up to fully contributing, pushing how high an employee can go, and extending the time they stay with the business, as well as keeping them engaged and motivated during their leaving period, a better ROI can be generated for the business, and an improved employee experience will be created.
Sport is a great place to look for insights we can apply in business. The sporting world has embraced technology and data to improve team and individual performance – they measure everything to squeeze out that extra advantage and generate marginal gains. All this data is used to deliver insights and help improve performance, and if you can identify when performance peaks and then leverage it to extend that performance, not only can you create a better ROI, but you are also more likely to have happier employees and potentially greater sales.
When looking at how the sporting world looks to make marginal gains, there are ways we can apply this methodology to the employee lifecycle and make similar marginal gains that add up to significant improvements over time.
1. Getting race ready
From our perspective, it starts before an employee even joins. As a reward professional, I would say it starts with your reward strategy and market stance. However, if you don’t understand how you compare to the market, who your competitors are or what talent pools you are fishing in, you can spend a lot of money attracting and recruiting the wrong hires.
For a prospective employee, it starts when they see job advertisement. Employer brand counts for a significant part of initial attraction – not just the package on offer, but how the business is seen to conduct itself. Glassdoor has become a bit like Trip Advisor for jobs and can influence prospective employees’ perception of your business.
2. Off the blocks
By giving people confidence at the start, we can shorten that ramp up time significantly, so having clear expectations around role and new employees fit with rest of organisation is vital. This can be achieved through up to date job descriptions, organisation charts and clarity about the level they sit at and reporting lines. We know the basics are often out of date, so can we really expect people to ramp up quickly when they don’t really understand what they are there to deliver and what difference it makes to the business?
3. Accelerating pace
We know from Dan Pink’s work that autonomy is one of the key facets to motivate people in work. Where people are trusted and feel accountable for their own delivery, the only ceilings set are the ones they create themselves. People are far more likely to feel autonomous and create opportunities themselves if we don’t enforce artificial ceilings. Helping employees understand the areas that matter most for them – building on their strengths and coaching managers to develop skills to get the best from their teams – is one way to significantly improve how high people can go.
4. Extending stamina
Increasing how much higher people can go and extending stamina in role often relates to confidence and recognition, or a lack there of. Often, it’s a lack of recognition, and a lack of feeling valued and appreciated that is the catalyst for many people to change roles. A common theme we see in employee surveys is that a simple thank you will suffice, but recognition is one of those aspects of reward that is hugely undervalued and is just assumed to take place. If you don’t have a good handle on recognition in your company this is one area to look at urgently, as it can make a big difference in terms of extending staff loyalty.
5. Increasing the distance
Perhaps the most critical factor in Employee Lifetime Value can be the length of time they stay with your organisation, as this is when you start to see the true ROI. Even if people are motivated and delivering in their role, if they can’t see how they can grow their career or progress their pay, they will decide it’s time to move on. Alongside this, there is also something to be said for making the deal stickier with factors other than pay – for example, we know that flexible working helps retain people for longer.
6. Passing the baton
We don’t necessarily want everyone to stay forever, but for those who are contributing and decide to move on to develop their skills in a different environment, it is worth considering how that exit is managed. If we can’t extend their stay, it is worth considering how to keep motivation levels relatively high to ensure successful handovers and to retain that relationship where they may become alumni, with a long-term retained interest in your organisation.
The author is Justine Woolf, director of consulting at Innecto Reward Consulting.
This article is provided by Innecto Reward Consulting.
In partnership with Innecto Reward Consulting
We have more than 20 years' experience in getting employers' pay and reward working harder for them.
