The current workforce shortage and employee retention struggles are issues of concern for organizations. Many leaders struggle to attract and retain the workers they need.
A combination of factors has resulted in an insufficient number of workers to fill the available jobs: job resignations at historic highs, declining immigration and fewer people of working age (16-64 years). This labor shortage began before the COVID-19 pandemic and is expected to persist for some time.
And then there are those who have a job but are not happy with it. A recent poll found that over 40% of people are planning to quit their current job this year. The pandemic has caused many people to re-evaluate their professional lives and what they are ready to accept.
Raising wages and providing attractive benefits are the main traditional tools employers use to attract and retain quality people.
In this new environment, however, employers should not limit their thinking to purely financial compensation. Addressing “emotional compensation” will be increasingly important and appreciated by employees.
In nearly 20 years that my colleagues and I have studied and helped leaders, we have learned that boosting emotional compensation is based on meeting seven universal human needs to thrive at work: respect, recognition, belonging, autonomy, personal growth. , sense, and progress. The sense of connection that results from meeting these needs engenders positive emotions and makes us feel connected to our work and to our colleagues.
The most effective leaders know that high levels of emotional compensation benefit the individual as well as the organization. Leaders who cultivate a culture of connection by communicating an inspiring vision, valuing people and giving them a voice will meet the seven needs. In turn, they will unite employees and foster a relational environment that helps people do their best.
Costco’s “Doing the Right Thing”
Costco attracts, engages and retains employees at levels that are the envy of its competitors. Not only does it pay workers the highest level of wages and benefits for its industry, but it also cultivates a culture of connection that produces positive emotions. I’m not at all surprised that Costco ranked # 4 on the Forbes / Statista list of “America’s Top Large Employers 2021” and topped the retail and wholesale category. Costco has consistently been in the top five on the list for years. The executives at Costco are clearly doing something right.
Jim Sinegal, co-founder of Costco, once told me that the culture of Costco can be described as “doing the right thing.” By that he means Costco:
- Obey the law
- Takes care of its members (i.e. customers)
- Take care of its employees
- Respect his suppliers.
By adhering to these standards, Costco rewards its shareholders. It is a victory for all parties.
Costco employees take pride in working for an organization that does the right thing. They know that Costco executives value them as individuals and don’t view or treat them as mere means to an end. Costco promotes from within and invests in apprentice-type training to develop employees and give them opportunities for advancement.
Plus, it gives employees a voice to share their ideas. When I spoke at Costco’s one-year annual directors’ conference, I witnessed video after video of warehouse club employees around the world who proudly shared the ideas they came up with for improve efficiency, reduce costs and improve the member and employee experience. These aspects of Costco’s work culture stimulate positive emotions in employees.
I wrote in this space about how Costco is living their vision, which could help you on your organization’s journey.
Costco is just one example of leaders and organizations driving emotional compensation by cultivating cultures of connection, as I documented in my book “Culture of Connection.” These include Oprah Winfrey while running her media companies, Tricia Griffith of Progressive Insurance, Alan Mulally when he was CEO of Ford Motor, Adm. Vernon Clark of the US Navy, and Steph Curry and Steve Kerr of the NBA Golden State Warriors basketball team. .
Positive emotions at work are especially needed today
The Gallup Organization’s ‘State of the Global Workplace 2021’ revealed that:
- Negative emotions among employees around the world have been increasing for years and reached record levels in 2020
- 7 out of 10 employees are currently in difficulty or in pain
- 80% of employees are not engaged or are actively disengaged at work
These statistics may seem grim, but leaders should see them as a major opportunity.
People aspire to more positive work cultures. The signs are there that emotional compensation would be highly appreciated by employees. Exiting the pandemic is a natural time to make improvements, especially as we’ve learned from COVID-19 why relationship connection is so important.
Given the economic and emotional benefits of working for leaders and organizations that cultivate cultures of connection, it’s no wonder that organizations that pay well and offer emotional compensation become the employers of choice in their industry. . Connected and engaged employees are more collaborative, innovative and productive. Executives and organizations that get the right emotional pay will gain a competitive advantage.
Michael Lee Stallard, President and Co-Founder of Connection Culture Group, is a thought leader and speaker on how effective leaders strengthen human bonds in team and organizational cultures to improve the health and performance of people. individuals and organizations. He is the author of “Connection Culture” and “Fired Up or Burned Out”.
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