4 Business Lessons Learned From Studying Free Agents
A Note From The Editor
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You wouldn’t have known it while watching the Bronco’s Superbowl 50 victory parade as it made its way through the streets of downtown Denver this past February, but there was a feeling of uncertainty in the air.
Once the victory celebrations were over and the champagne dried up, the dreaded “Superbowl curse,” was to strike again, and rival teams would come knocking on the door for key players.
Within days, the winning team would be disbanded. Peyton Manning’s retirement was just the beginning. The departures of Malik Jackson, who signed a six-year contract with the Jaguars, and Danny Trevathan, who joined the Bears, would further weaken the team. This would be followed by followed by the news that quarterback Brock Osweiler, who had been pegged as Manning’s presumed successor, would be leaving for the Houston Texans.
Losses are expected, but they can still be devastating. You can’t fault the players for leaving the team for greener pastures, but at the same time you can’t help but feel for the NFL champions.
In football, as well as business, the concept of free agents can cause a world of uncertainty to even the strongest team. Talent is free to go, and head-hunters can poach your all-star players. It’s especially disheartening when this loss comes after a major win -- such as an acquisition, or significant award or accolade.
In a world where talent comes and goes, people leave, and key players are frequently replaced with new ones. I’d venture to say that as employers, we would do well to up our game and devote more resources into keeping our existing team players.
Finding solutions to keep both parties happy is mutually beneficial, since keeping a good team intact has considerable benefits for the company and employees alike. Here's what you can do about.
Why free agency?
“Staying employed at the same company for over two years on average is going to make you earn less over your lifetime by about 50 percent or more,” writes Cameron Keng. But is this always the case?
Not necessarily. The assumption behind this claim is that workers will continue to have the same role at a company. But workers don’t have to leave the company in order to advance their career. Often, there are opportunities for internal advancement a lot closer to home.
In fact, according to an article by Harvard Business Review, employers who stay with the same job for longer find it easier to rise in seniority, since they won’t have to constantly compete for a role at each new company that they apply to.
Additionally, while leaving may be tempting for some, there are real risks associated with jumping ship. Joining a new company means proving yourself to a group all over again, and having to show your worth. Getting used to a new team’s dynamics takes time, and things don’t always work out as planned. And, of course, there’s always the risk that changing jobs too frequently will reflect poorly on your resume, and could see you labeled as a job hopper -- something that some employers may look negatively upon.
While you’ll want to ensure that you’re receiving a competitive salary, there are other areas to consider as well. There’s value in sticking with a company long enough to help it grow and become successful, and seeing something through from beginning to end.
Benefits of talent retention.
But it’s not just employees who can benefit from staying with their company. For companies, talent retention is an important and serious issue that employers are facing today.
As the economy continues to improve, companies are competing for top talent and employees are feeling more confident and willing to take risks.
Employers without talent retention strategies will only be hurt by employee turnover -- the costs of which are increasingly high, with some estimates putting it as much as one and a half to two times an employee’s salary. This, combined with other costs such as a drop in productivity as well as decreasing employee morale means that companies that don’t invest in their personnel will be losing out.
According to a recent survey by Monster, 82 percent of workers claimed to have updated their resumes in the last six months. Additionally, 56 to 60 percent are actively in the market for a new job and according to Bloomberg, this trend is only expected to continue. This should come as a wake-up call to employers everywhere.
Give your team a reason to stay.
Don’t wait until your workers leave to try to discover why they’re going -- by that point it’s too late. Instead, be proactive with talent retention to keep your team from defecting to the competition with these four steps.
1. Talk with your staff.
First and foremost, you’ll want to have an honest discussion with your team. “Employers should start sitting down with their top people throughout the organization, today, to get a fix on where those people stand, if they are happy and if they still consider their job a good fit,” advises John Reed. Find out what your workers value in their career, and what opportunities you can offer them to encourage them to stay longer.
2. Give your workers opportunities to advance.
Employees often consider leaving for a better opportunity to advance their career. If your company doesn’t currently offer opportunities for advancement, you’ll be at a serious disadvantage when it comes to talent retention. According to the Wall Street Journal, organizations should look to promote from within whenever possible. Giving employees a clear path for greater career responsibilities will help them to feel more invested in the company, giving them a great reason to stay.
3. Offer training opportunities.
Motivated workers want to keep learning. Encourage your employees to seek training and offer incentives for it -- such as reimbursement for tuition for continued education, or training for additional qualifications. Employees will appreciate this investment in their education, and it can serve as a powerful incentive to stay.
GE Capital is a great example of a company that’s committed to investing in employee education. They provide learning throughout an employee’s career with opportunities for skills training, leadership training, as well as professional development.
“Learning cannot just be an afterthought. It must be a core focus of any strong organization,” says Kevin Griffin, company CIO. “There is never a point during your career at GE Capital when you’re done learning.”
4. Offer competitive salaries and incentives.
Finally, one of the main reasons that workers leave is for a better paycheck, so make sure you’re paying your team a competitive salary. Along the same line of thought, always give your top performers meaningful promotions, nothing will frustrate them more than a pitiful raise.
The Wall Street Journal also mentions offering stock options or other financial awards for employees who meet performance goals -- and who stay for a predetermined period of time, three or five years, for example. You could also offer cash bonuses if they meet specific objectives.
In the end, you won’t be able to stop everyone from leaving, but by being proactive with your talent retention -- communicating, offering competitive wages, and providing opportunities for career investment -- you won’t have to lose sleep over key players being poached by the competition. Looking for ways to improve employee loyalty will benefit both parties -- and help you to keep your all-star team intact.