In one of the tightest labor markets in a very long time, companies are looking for ways to attract and retain employees. Therefore, it should come as no surprise that many of the most attractive employers are making substantial investments in expensive and thoughtful perquisites. Employers looking to hire and keep premiere talent would be well served to include in their benefit packages the most valuable and cost effective perk – encouragement.
In an effort to out-do one another, cutting edge employers have raised the stakes in creative and enticing perks. In an article from Business Insider, Rachel Gissett identifies 30 “Incredible Perks” including:
- 5 months paid leave for mom and/or dad plus an additional 8 weeks of paid medical leave for mom (American Express)
- 6 days PTO to volunteer for a charity of choice and an annual stipend of $1,200 to donate to charity of choice (Salesforce.com)
- Employer match on employee contributions to 401(k) of up to 8% (USAA)
- Global soccer tournament between offices from around the world (Bain & Company)
These are expensive employee benefits (maternity/paternity pay could easily exceed $100k for some higher level employees). Yet, they are also very strategic – designed to promote those things which are mutually beneficial to the employee and the employer (commitment to family, giving back to the community, savings, team building and fitness).
Perks like these are outstanding and those employers should be applauded. However, research has found that the things most important to employees are tied to encouragement. In an article in Inc., contributor Issie Lapowsky listed the 10 things employees want most in a job and two of them are related to encouragement, (#1 and #6) and only one of them had to do with pay and benefits (#10). Employees want to know that what they do at work and how they do it matters. It is important for them to be convinced that they are important.
The amazing thing about this perk is that it does not cost the employer a penny. It does require a commitment from the top and buy-in from all who manage to be fully engaged in the practice of specific, genuine and consistent encouragement. The word encourage means “to give courage”; courage to take risk, learn from mistakes, be curious and go the extra mile. Withholding encouragement works in the opposite way – it robs employees of the confidence and resolve to excel.
Managers who find it hard to encourage are usually dealing with some of their own insecurities. If they were never (or rarely) encouraged, doling it out in generous portions will not come naturally. Many of those who are stingy in this area feel that telling someone they are doing a great job will engender complacency. It has been my observation that employees will be much more inclined to work even harder if they are acknowledged for their effort and contribution. In the unlikely event that you have an employee who responds to encouragement by dialing down the diligence, you have the wrong employee and you should fix that.
Companies that make significant financial investments in employee perks are usually effectively encouraging their employees. There is a connection between the value management places on employee morale and a sincere commitment to encouraging employees – it is unusual to find one without the other. Obviously there are a number of ways to employ a resolve to foster an environment of affirmation and each company needs to find those that work for them. At Anchor Loans, we have incorporated a number different tools to cultivate a culture in which employees are regularly reminded of how they are making a difference here. We encourage our employees to encourage one another publicly (we post on our Kudos wall, expressions of appreciation for a job done extraordinarily well). We honor an employee of the month publicly. We give managers a monthly budget to be spent on team building events.
It would be full-on naiveté to think that you can attract and retain exceptional employees with encouragement alone. It is just part of the compensation package. What you give employees sends them a clear message regarding how you value them. Think of words of encouragement as a safe. It helps ensure that the financial investment you have made in your employees is not taken by someone else.
Bryan Thompson, Anchor Loans’ CFO, has over 20 years of finance and operations experience, including with mortgage firms. His expertise includes analyzing projections, creating annual budgets, raising capital and creating robust financial modeling.