06 Dec The Gold Rush Effect (Why Your Employees Don’t Stay)
“On January 24, 1848, James Wilson Marshall, a carpenter originally from New Jersey, found flakes of gold in the American River at the base of the Sierra Nevada Mountains near Coloma, California…By mid-June, some three-quarters of the male population of San Francisco had left town for the gold mines…”
-The Gold Rush of 1849
Among those men were doctors, ranch hands, lawyers, teachers, dentists, accountants, and politicians. They all picked up and left to become gold miners. Why? Didn’t they already have jobs? Weren’t those careers fulfilling for at least some of them? Gold mining wasn’t what one would call a prestigious profession. Consider, how many people would vacate your office if large amounts of gold were found within 300 miles, and anybody could go claim it.
-Courtesy of Saturday Morning Breakfast Cereal
The disappointing reality for most firms is that largely it’s the money (sometimes benefits but that is still money based) that is keeping people at work there, not a winning corporate brand. Some firms (call centers, temp agencies, hospitality, retail), recognize this, and their solution is to accept high levels of churn, also acceptable for part-time retail workers.
sounds suspiciously close to that “three quarters” figure we noted during the gold rush above. Even outside those industries, when firms poach an employee from a competitor by offering them more money and perhaps some benefits, they are totally unprepared for that same employee to turn around and leave again 2-4 years later. What can be done?
1: Defined Employee Progression Plan: Every employee needs to have a defined future in your company. Clear career progression, and incentives that tie to it (Pay increases, work time flexibility, holiday increases, pensions, stock options, etc). No employee should be left to their own devices in this regard. If you can’t find a way to create those opportunities, your employees will leave when they feel stuck or feel able to earn more money elsewhere (Gold Rush Effect). Find out what your employees would respond to in incentives on a case by case basis, and offer it to them. Be prepared to get creative when a competitor tries to poach them.
2: Skill building opportunities: Employees will often forgo money in exchange for training in a skill. Along with a progression plan, employees should be given copious opportunities to learn how to cultivate useful skills. The write once sat for a training class for an enterprise software that lasted a total of 1 hour. It’s not enough time. Consider providing serious skill boot camps for your employees, and follow-up on helping them immediately put these new skills to use in their jobs. Employees that feel they are progressing are more likely to remain.
3: Keep the door open: Sometimes our employees leave because they think the grass is greener on the other side. This is increasingly true for millennials. Why do we let all that training and investment leave without keeping a line open in case they are willing to come back? When our employees leave why don’t we follow-up and see how they are doing in their new roles? We may find many of them are dissatisfied, frustrated, and even eager to come back. Is there something more than our pride keeping us from inviting them back? Note: This advice does not apply to employees who were dismissed for misconduct, incompetency, or refusing to get along with others.
Our employees have passions and dreams they cannot pursue for want of money. As a firm we are in a position to enable those dreams by offering them money for their talents and skills, but also inhibit them because we take up their time. To the extent we can make our firm a part of what they are passionate about, we should. To the extent we can incentivize the behaviors we want in our employees (loyalty, hard work, efficiency, cooperation) we should. Never underestimate how much people respond to incentives. To the extent we can figure out how our firm interferes with what our talented employees are passionate about, we should, then figure out a game plan for easing off that interference, or harnessing it.
Author – Taylor Bradford