When an employee reveals their intention to quit in favor of a better job at a different organization, it’s not unusual for an employer to try to persuade them to stay by offering them a higher salary. Indeed, such counteroffers are so commonplace that unhappy employees will occasionally solicit outside job offers just to pressure their current employer into giving them a raise. Yet new research from the global staffing firm Robert Half finds that while most US employers make counteroffers to departing employees at least some of the time, they usually fail to retain these employees for the long term.
In an online survey of over 5,500 senior managers in a variety of professional fields across the US, 58 percent said “yes” when asked whether they ever extend counteroffers to employees to keep them from leaving for another job. However, when asked how long employees who accept counteroffers typically remain with the company, the mean response was 1.7 years:
“Counteroffers are typically a knee-jerk reaction to broader staffing issues,” said Paul McDonald, senior executive director for Robert Half. “While they may seem like a quick fix for employers, the solution is often temporary. When employees accept a counteroffer, they will likely quit soon afterward.
Professionals should avoid these offers, McDonald advised. “Money doesn’t solve everything. If you accept a counteroffer, your employer may question your loyalty to the company. And, more importantly, the root causes of why you were looking to leave in the first place may still exist.”
The staffing firm cautions both employers and employees against counteroffers for several reasons, noting that they can cause morale to suffer by sending “the message that threats of leaving are a means of climbing the ladder, rather than outstanding performance and dedication.” An employee retained with a counteroffer will often be distrusted for the remainder of their tenure with the organization, while their performance is unlikely to improve, knowing that the firm was willing to spend money just to keep them around a little longer.
The clearly superior alternative to counteroffers is to proactively identify employees at risk of quitting and give them reasons to stay before they go out looking for a job somewhere else. According to our research at CEB, now Gartner, this means creating compelling career paths for employees, including ample opportunities for learning and professional growth, so they can see a long-term future for themselves as part of your organization.
Employee monitoring technology is often depicted as “Big Brother” watching over employees to enforce maximum productivity. However, as these technologies become more common, organizations are finding opportunities to use them in ways that benefit employer and employee alike. TechCrunch’s Steve O’Hear reports on one London startup, Zego, which has devised a way for delivery workers on gig economy platforms to insure their vehicles at an affordable rate by charging them only for those hours when they are logged into the platforms they use to find work:
The startup has also developed good relationships with the platforms it supports, meaning its insurance app is able to connect to those on-demand food delivery platforms so that Zego-insured drivers don’t need to manually tell Zego when they are and aren’t working. Instead, the cover kicks in as soon as they log on for a delivery shift.
And because Zego knows when a person is or isn’t out driving and where, it is potentially able to use this data to adjust its risk assessment accordingly. The startup is also exploring telematics — the use of tracking hardware and software — as another way of more accurately pricing its pay-as-you-go cover or helping to reduce risk by perhaps warning drivers when they are being unsafe.
Zego’s product responds to a demand for ways to give workers in the UK’s ever-expanding gig economy at least some of the benefits and protections enjoyed by full-time employees, in a flexible, portable form that fits with their work lives. It also collects a lot of data on its users, but Zego is betting that they will be perfectly happy to trade that data for reduced insurance costs. In fact, the pay-as-you-go insurance policy is one of their main branding points on their site. Because Zego is offering a value proposition where workers benefit from the collection of their data, they don’t mind the company knowing when and where they work.
Employers can benefit from a similar approach when implementing employee monitoring technologies or otherwise collecting employee data. Research we at CEB, now Gartner, conducted last year found that most employees don’t consider it unacceptable for their employers to monitor their activity at work. Among millennials, 70 percent don’t mind being monitored as long as the purpose of the monitoring is to help improve their performance. Our findings suggest that employees are less resistant to these new forms of monitoring than employers may think, but also that they are even less likely to object when they see a direct benefit.
Last month, a News.com.au report highlighted a novel way that a CEO in Australia has been trying to encourage better work-life balance and less presenteeism in his workforce. Robbert Rietbroek, CEO of PepsiCo in Australia and New Zealand, asks his executive team to “leave loudly” when departing the office so that they are being extra visible (and audible) role models for junior employees.
“If I occasionally go at 4 pm to pick up my daughters,” Rietbroek told the news site, “I will make sure I tell the people around me, ‘I’m going to pick up my children.’ Because if it’s okay for the boss, then it’s okay for middle management and new hires.” He added that if you are “younger or more junior, you need to be able to see your leaders go home, to be comfortable to leave.”
Since Rietbroek became CEO in 2015, he has been promoting a number of family-friendly workplace policies, including 16-week parental leave, flexible work times, and summer Fridays. The benefits are not just limited to working parents, either, as the flexibility is centered around the concept of “One Simple Thing,” where an employee can pick the most important thing in their personal life and can build a work schedule around that. For many, the one simple thing is being more involved in their children’s lives, but for others, like the head of procurement, it can be a hobby like surfing.
Part of the old, negative stereotype of HR is that it is a function driven entirely by rules and procedures, concerned mainly with compliance and ensuring that employees do not engage in behaviors that could harm the organization. As the role of HR and talent management has evolved into something more strategic, however, the rules-based mentality has become more of a liability for organizations that want to develop high-performance cultures and unleash their people’s potential.
At the Harvard Business Review last week, HPWP Consulting founder Sue Bingham made the case against overly prescriptive HR policies, arguing that policies focused on preventing bad behavior by a minority of employees only cause the majority of employees who do have the organization’s best interests in mind to feel distrusted and belittled. This in turn makes it harder to attract and retain high performers. In the alternative, she advocates for policies that focus on setting positive expectations rather than proscribing specific infractions, and that treat employees as intelligent adults capable of using good judgment.
In other words, organizations need principles, not rules, Eric J. McNulty argued at Strategy+Business last week, as principles “give people something unshakable to hold onto yet also the freedom to take independent decisions and actions to move toward a shared objective”:
In some rule-based enterprises, it is the enduring, mythical power of a four-inch-thick procedure manual that lays out exactly what workers can and cannot do. In others, it is accumulated organizational ossification. Of course, there are regulations, union rules, and other legitimate constraints. Too often, however, rules were designed to fix the problems of yesterday and remain in place long after the problem itself has changed. …
Volkswagen has been undergoing a massive process of cultural change since the 2015 emissions cheating scandal that cost the German automaker billions of dollars and severely damaged its reputation. Changing the culture of a huge company is no small feat, of course, and CEO Matthias Müller has spoken candidly about the challenges the company has faced in that process. In a recent interview with the Wall Street Journal’s William Boston, Müller touches on how the change is going.
The company now holds its board responsible for legal compliance and integrity, he tells the Journal, and has changed many of its processes. New board members are subject to compliance checks to ensure they are above suspicion, and the leadership is to engage more people in dialogue to build trust throughout the organization. Some of the changes involved in Volkswagen’s transformation have included replacing German with English as the language of business at large-scale management conferences and increasing the number of women in leadership positions.
A key challenge is repairing Volkswagen’s reputation, Müller explains, as parts of the company did indeed engage in criminal behavior, which casts a pall over the entire organization. That kind of damage can’t be repaired overnight. Large enterprises like his also have a tendency to move slowly, he acknowledges, but he would like to accelerate the pace of change as much as possible.
Volkswagen’s experience at carrying out a major culture overhaul in response to a crisis carries some lessons for other organizations, which overlap with some of the insights we at CEB (now Gartner) have uncovered in our research into the multifaceted challenge of culture change.
A new survey of ethnic minority business leaders in the UK from the consultancy Green Park shows that racial discrimination remains a serious challenge in the British workplaces, while UK businesses are not making sufficient progress toward meeting diversity and inclusion goals. The survey’s headline findings include that 18 percent of these leaders have personally experienced workplace discrimination in the past two years and that 82 percent of them do not trust their organizations and believe that there is institutional prejudice against minorities in the UK, People Management’s Emily Burt reports:
Meanwhile, just 2 per cent of companies surveyed by Green Park reported that they were meeting their targets for ethnic minority board-level representation, while more than a tenth (13 per cent) said they had an ethnic diversity target but no strategy for meeting it. …
However, nearly three-quarters (73 per cent) of those surveyed felt most workplace prejudice was unconscious. In light of this, the researchers recommended that changes in attitudes towards institutional racism must come from the top and not just left to HR to “sort out”. But while 60 per cent of the surveyed ethnic minority leaders said they believed tackling institutional racism had moved up the organisational agenda in recent months, two-thirds of these respondents said workplace language around racism was emotive and made people uncomfortable.
Burt also points to a study published earlier in the year by the University of Manchester, which reviewed 25,000 incidents of racism in the workplace and came to the conclusion “that workplace racism was increasingly normalised,” with nearly 30 percent of surveyed employees saying they had “either witnessed or experienced racism from managers, colleagues, customers or suppliers.”
Meanwhile, the BBC reports on another new study conducted by the Trades Union Congress, which also found that more than one third of black or minority ethnic workers have experienced racism in the workplace:
“People don’t quit their jobs; they quit their bosses,” the saying goes. While the actual motivators of employee attrition are a bit more complex, managers who mistreat their subordinates are certainly more likely than average to drive them out, harming the organization and its reputation. Some new research sheds more light on how employees’ perceptions of their direct managers influence how they feel about their organization’s leadership as a whole. At the Harvard Business Review, University of Iowa business professor Ashley Fulmer explains how trust in a direct manager can translate to trust at the executive level:
In our study, we tested whether employees who trusted their frontline leaders subsequently trusted their senior organizational leaders. … We found that trust transferred up when frontline leaders exhibited behaviors that were perceived to show high procedural justice, such as making decisions in an unbiased manner and listening to followers’ concerns. In other words, when frontline leaders were perceived as being more fair, employees who trusted their frontline leaders had more trust in senior organizational leaders. …
In the final part of our trickle-up model, we compared the effects of trust in frontline leaders and trust in senior leaders. We found that even though trust in frontline leaders was important because it influenced trust in top leadership, trust in top leadership contributed to the organization’s overall well-being by exerting a stronger impact on employee performance.
Our latest research at CEB (now Gartner) also finds that employee perceptions and engagement go hand-in-hand with how much they trust their managers. In a forthcoming survey conducted as part of our work on organizational culture, we find that employees who trust their managers to do what they say they are going to do are more than three times more likely to view communications from the organization as being honest and open. Employees that have high levels of trust are also more likely to have high levels of discretionary effort and nearly twice as likely to have high levels of intent to stay.