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Why is it important to ask your workers how valued they feel? In this article, our Head of Social Impact, Mark Griffiths, explains why the answer you get could be the key to a happy, engaged and loyal workforce.
When dealing with challenges or opportunities, identifying the leading indicators can help to predict their future impact on your business.
For example, sales teams may look at the number of new leads they have to predict future deals closed, school teachers may use classroom assessments to predict pupil performance in end-of-school exams, or business strategists look at adoption rates in early markets to predict the future size of a market opportunity.
These exercises allow advanced planning for future need. And, even more importantly, interventions to be put in place to reduce the size of the challenge.
Now, as the Great Pandemic ebbs into the Great Resignation, many business leaders are asking what more they can do to retain their workers. This is no different in the gig economy, where retention is a well-documented problem.
Even before the Great Resignation, some reports suggested turnover in the space was as high as 500%. Uber has responded to its driver shortage with referral bonuses, pay rises and a $250m “stimulus” package. Alongside that, the New York Times reports that Amazon’s turnover is so high that Execs have worried that they would run out of people to hire.
The platform economy is especially in need of evidence-based guidance on retaining its workforce.
In the search for practical solutions, a valuable leading indicator would be asking platform economy workers a simple question: how valued do you feel?
A disconnect between what managers think, and what the truth is
According to research from McKinsey, the most common reason for quitting a job are feelings of not being valued by the organization where you work (54% of responses).
Worryingly, the same survey finds a disconnect between what managers think the main drivers of staff turnover are – they cite compensation, work–life balance, and poor health - and what their people are actually saying.
There are many possible reasons why someone will not feel valued. For example, they may have been passed-by for a promotion, be working with a poor manager, or feel under-thanked.
A rigorous study - “probably the best available scientific evidence on the topic at the moment” - helps us better understand the relative significance of these possible reasons across a large group of 669,000 people.
One of its insights is that:
“The actual salary (intended as monetary compensation) has only a small-to-moderate effect on the decision to leave. Actually, rewards beyond pay matter more, especially benefits, training courses, and career growth opportunities.”
What do we take from that?
I think two messages: feeling valued matters to retention and, despite what we may think, financial compensation is not as significant a factor as we think in explaining this.
The link between feeling valued and emotional attachment
Theories of human psychology can help us understand why we are seeing the data that we do - and so why retention programmes that ignore the human need to feel valued are incomplete.
For example, Social Exchange Theory offers an explanation of human behavior in terms of a reciprocal dancing act, with people treating others as they have been treated. We repay kindness with kindness, bullying with bullying, and indifference with indifference.
This applies equally to how we feel about the organisation where we work.
People who feel valued because their wellbeing at work is treated seriously are more likely to reciprocate that with an emotional attachment to their organisation.
And so, in turn, are more likely to stick around.
Taking action is possible
A good job is made up of a basket of characteristics - for example, supportive relationships, the nature of the work itself, and pay and benefits.
While recognising that all of these are important for motivation at work, the reality is that some of these are harder to change than others. For example, improving the work environment by making it safer is generally easier than redesigning a role to make it more interesting.
A discussion paper on the ‘Road to good work’ from the CIPD notes that “workplace physical and mental well-being matters more than anything else when it comes to key outcomes, such as job satisfaction and day-to-day enthusiasm for the job.”
And so, we can add, to retention.
Encouragingly, they also note that improving these aspects is possible whatever the nature of the job or task. That is, practical programmes can quickly get leverage here.
Asking people if they feel valued rarely features as a dash-board indicator for Execs, but there are good reasons why that should change.
The best available evidence implies not just that it is a strong predictor of an outcome that is already taken seriously - worker retention - but that it is also a factor that can be positively influenced by practical interventions that we know how to deliver.
There’s bang for your buck.
Want to find out more about worker retention in the gig economy? We’ve got just the webinar for you - check it out here.