Despite Having the Best Perks, Tech Workers Are Among the Least Loyal Employees So, how else can you get employees to stay at your company?
Opinions expressed by Entrepreneur contributors are their own.
A few decades ago, you'd be far more likely to see people stay at the same company for their entire lifetimes. Today, people average about 12 job changes in their careers, with some industries facing higher turnover rates than others. For example, according to a LinkedIn study, the technology sector faced the highest turnover rate, at 13.2 percent. Of all the industries, tech companies provide some of the most elaborate perks for their employees, with campuses that feature free food, fitness incentives, spa treatments -- the list goes on and on.
The secret to retaining employees may lie in something far more basic than perks. Simply put, a blend of location and the shared sense of purpose you create can make employees stick around for longer.
Considering the intense talent poaching that takes place in top innovation regions such as Silicon Valley and New York City, there's a major case for locating in a smaller city with access to university talent. For the business owner or CEO, there's still a strong talent pool to pull from, and for the employee, there's a higher quality of life that comes with shorter commute times and access to affordable housing.
Take my company, Plug Power, as an example. We're headquartered in Latham, N.Y. (just outside of Albany) and 25 percent of our 650-person workforce has been with us for five years or more. Latham is close to top technical university talent, including Union College, SUNY Polytechnic Institute and Rensselaer Polytechnic Institute, and has a strong manufacturing talent pool with transferable skills for the technology world. Our company wants to keep talented students in the market after they graduate, and retrain the area's workforce for new economy skills -- creating our own hub for hydrogen in the Albany corridor.
We're not the only company that has decided to locate in a smaller city. For example, Progressive Insurance is headquartered in Mayfield Village, Ohio, (population 3,387) and IBM's main office is in Armonk, N.Y. (population 4,330). In many cases, the businesses located in these smaller cities and towns serve as an anchor for regional employment.
And unlike a Silicon Valley, where the median home price in San Jose reached $1.1 million last year, increasing 32 percent year-over-year, smaller cities provide more accessible opportunities to own homes and face lower commute times than their major metropolitan counterparts. Pair that with increased job opportunities for smaller job markets, and you have a recipe for success. According to an analysis from Bureau of Labor Statistics data, the top cities with the most job opportunities, highest employment growth and highest socioeconomic scores were all smaller cities: Salt Lake City; Chandler, Ariz.; and Madison, Wis., respectively.
Stand for something.
Having a mission for your company's employees to rally around is no longer a nice-to-have, it's a must-have. According to a study by the Society of Human Resources Management (SHRM), 94 percent of millennials want to use their skills in the workforce to benefit a cause. If you're fortunate as I am to run a company that promotes the use of clean energy, this makes the job of creating a shared mission exponentially easier. But, standing for something good alone doesn't automatically make people feel a connection to your company -- it requires hard work on identity and culture, especially as your company grows.
For example, at Plug Power, we put a lot of heart and soul into developing a brand promise that serves as a rallying cry for employees both internally and externally. Our term "Infinite Drive" defines our company's energy and commitment to bring clean energy technology to the global market. Internally, the brand promise gives our team "swagger" -- a little confidence is contagious, and good for business.
I'd encourage you to think about what your company stands for and make a public statement about it that people can be proud of. Back up that statement regularly with both your words and actions, and that brand promise becomes a reality. These statements are popular with large, consumer brands like Coca-Cola and Walmart, but it doesn't mean it shouldn't be done for B2B companies, as well.
In addition, since we have offices in multiple states and countries, it's important to help employees understand what's happening within the organization, outside their day-to-day work. We offer a course, Plugology, which spotlights departments and functions, giving a snapshot into peers' work life. This offers employees an intimate understanding of how the business is an ecosystem in itself, with each department relying on the other. I'd highly recommend a similar effort for any company with more than one office.
Even if you don't have an inherently mission- or cause-based company, your organization can still choose to rally behind an issue. Nearly 60 percent of the millennials surveyed in the above SHRM study said they'd like more company-wide service days. Take the time to talk to your employees and identify a cause they're connected with, and commit to executing on service or volunteer days when employees can share in a sense of purpose. For example. Deloitte has a well-known CSR initiative to provide skills-based volunteerism to help more members of its communities secure gainful employment.
To sum up, the secret to retaining employees doesn't lay in elaborate perks. It's about listening to employees, giving them something to care about and providing them with the opportunities and quality of life that makes them want to come back year after year. Maybe the lifelong career isn't a reality for a lot of people anymore, but it wouldn't hurt if we tried a little harder to make our valued employees want to stay.