For many years we have advised organizations of all shapes and sizes on best practices for employee retention and how to control employee turnover. Sometimes senior executives will call me in a panic over one particular superstar whom the executive is suddenly afraid might leave: “He has one foot out the door. What can we possibly do to keep him?”
Why shouldn’t employees who are worth more negotiate for the best deal they possibly can? Are you a communist? The imperative of negotiating generous terms and conditions with the best talent is just the application of free market principles to employment relationships. Employment is a transactional relationship. The question is: Will you have the imagination to negotiate fair and compelling deals with your superstars? And will you be able to muster the discretion and resources to make those deals? The best people at every level should be in a position to negotiate the best deals. When a valuable person goes to the trouble of customizing his work situation, negotiating special arrangements with the organization, his manager and his coworkers, his stake in the position grows tremendously. His investment in the organization, his commitment, his willingness to deliver results grows.
Money is, by its nature, interchangeable. Custom work conditions most certainly are not. If money is the primary currency you have for negotiating with talent, it is very easy for your employees to measure it against deals offered by other employers. Just so you know, other employers tend to pay people in money too. More is always better. Any substantial differential in financial opportunity is hard to resist.
Make your value very difficult to match anywhere else. In your regular ongoing one-on-one dialogue with every person, you should be talking about not only what you need from each person, but also about what each person needs from you. Start talking with all of your direct-reports about retention on day one, and keep talking about it. Zero in on the superstars early and often. If you are talking with them about how to meet their needs and wants on an ongoing basis, they are much more likely to talk with you at those key points when they are trying to decide whether to leave or stay. If you are willing to work with them, you can be flexible and generous. That’s how you make them want to stay and work harder, at least for a little while longer. Those employees who turn out to be long-term employees will be the ones who decided repeatedly that they wanted to stay.