A Last-Minute Employee Retention Conversation
“A day late and a dollar short” could well describe management’s failed efforts to keep employees from jumping ship during The Great Resignation. It also explains why some managers don’t even make the effort. If they know their organization doesn’t have the financial or other resources to meet an employee’s demands or if the employee has already cleaned out their desk, then it’s a done deal. Why waste time trying to lure them back?
But what if it’s not too late? What if a valued employee appears to be waffling? What if your sixth sense tells you they are not entirely excited about the move? What can a manager do to save the day — and the company’s investment — at the last minute?
Have 'The Cost of Leaving' Conversation
When families weigh a decision to move from one geographical location to another, a key question to consider is, “How far will my salary go in that city?” Answering this requires comparing the cost of living in both places. In the common lexicon of economics, “the cost of living” is the amount of money needed to cover basic expenses such as housing, food, taxes and healthcare in a certain place and time period, according to Investopedia. It helps quantify and clarify how much more or less it will cost to live where they’re going.
I believe there is a similar calculation — and conversation — that Great Resignation managers can conduct with employees before they close the door behind them. It’s a conversation that might cause that employee to rethink their decision to leave. I call it the “cost of leaving” conversation.
When looking at the prospect of a huge salary increase, many employees will focus on that and be very adept at describing what they will gain by leaving. But a “cost of leaving” conversation will help them quantify what they will lose by leaving. And that cost conversation will be about far more than the price of housing and utilities. It will be about what I call an employee’s “fixed equity.”
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Every Employee Has a Fixed Equity
A financial advisor will tell you that equity is a measurement of gains, also known as profits or value, realized from an original investment.
A compensation analyst will tell you that employee equity is “the practice of granting stock to employees as part of their compensation packages” and that “if the value of that stock multiplies year-on-year, this stake in the business can become a huge financial asset for the employee in the future.”
If you ask me, I’ll tell you that an employee’s fixed equity is a little bit of both. I define it as “a measure of the value an employee has gained in a certain place and time period of employment.” It’s also a value that, if multiplied year-on-year, can become a leverageable asset for the employee in the future. That’s a good thing, right? Yes, and ….
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The Downside of Fixed Equity
Employees build their equity in “a certain place and time period of employment.” That’s why I call it fixed equity, and that’s also why it is probably most valuable and leverageable staying where it is. My career development experience has convinced me that an employee’s fixed equity often loses value when transferred to a new employer. It can lose its clout and become more fragile in a foreign environment.
But there is some good news in this for managers trying to lure waffling employees back. The concept of fixed equity provides a thought-provoking basis for initiating a “cost of leaving” conversation. It might be as simple as saying, “So, Chris, you have built up considerable equity here over the years. How much of it will you be able to transfer and leverage at the new company, and how much of it will you be leaving behind?”
For managers who don’t feel confident or comfortable guiding an employee through the possible answers to this question, I typically suggest they familiarize themselves with the following four categories of fixed equity.
- Community Equity: All employees have the opportunity — and expectation — of building both professional and personal relationships during their employment. They will get to know co-workers on an individual level based on shared values or talents and will form bonds that often last beyond the tenure of their employment. But this can make it very difficult and painful to leave that community.
- Influence Equity: Most employees will learn over time how to navigate the waters of their organization. They will come to understand and leverage “how we do things here” — who to call, who to ask for advice, what to say and not say. Whether by virtue of their positions or their personalities, they will develop the ability to influence other individuals or parts of the organization. Such influence, properly used, can be of tremendous value to them within their organization. But it will take a while to build that kind of influence in new one.
- Skill Equity: Employees bring certain skills to their job initially and then add to them — more often than not, based on the needs of the organization. This increases the employee’s skill equity in that organization. But will those skills have the same value in a different company or culture? A great IT person, for example, who takes a job at a different company may be disappointed when their manager deploys those same skills differently, or when they end up working on a team they don’t like working with.
- Financial Equity: Over the course of employment, individuals build up financial equity through salary increases, bonuses, profit-sharing, etc. But when the post-pandemic workplace offers them a whopping big signing bonus, many tend to forget the other factors that go into determining their longer-term financial equity. Things like gym memberships, childcare and free food, to name a few.
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Final Tips to Start the Cost of Leaving Conversation
If you’ve read the above but are wondering how to start a cost of leaving conversation, try out the following prompts.
“Cost of Leaving” Prompts
- “Do you know how much your _________ equity will be worth at your new company?”
- “Which of your four equities will you have to leave behind?”
- “Is this the best time to leave this equity behind?”
- “How much more will this equity be worth if you stay another 6 months/1 year/3 years? In what way?"
- "How quickly will your next career goal be realized at the new company?"
Even if a cost of leaving conversation does not end up changing an employee’s mind, it will send an invitation for them to think about it and perhaps even reconsider. As important, it will in most cases linger with them. They often take a question they can’t answer, bring it home, and sleep on it. In fact, as Russian psychologist Bluma Zeigarnik found in 1927, we remember better what’s incomplete. The mind, uncomfortable with what has been left unfinished, continues to focus on the question or problem.
So go ahead and courageously ask the challenging questions. They are all good thought provokers that an employee will contemplate at least for a while.
About the Author
Dr. Beverly Kaye is recognized internationally as one of the most knowledgeable and practical professionals in the areas of career development, employee engagement and retention.