Holding on to your valued workers doesn’t end with a competitive paycheck. It requires an environment of great management, open communication, empowerment, and recognition.

While the U.S. economy may be growing at a rate of 3-4% each year, employers are seeing a corresponding decrease in the availability of bright, talented 35- to 45-year olds.

When you combine that with the idea that at any given time 75% of the employees in a typical organization are at least passively searching for new jobs, you begin to see how a raging talent war is just around the corner.

If corporations can’t stop the shrinking of the workforce, then HR executives and hiring managers are going to have to put greater focus on how to retain the talented employees they already have.

According to Paul Glen, author of Leading Geeks: How to Manage and Lead People Who Deliver Technology, there are two forces at work in employee retention: engagement and coercion.

When employees are emotionally connected to their work, they are engaged. But when forces outside an employee’s control — such as policies and compliance — enter the picture, these either promote attachment to, or disengagement from, the company.

Where to Start
Building a culture of retention starts with an understanding that talented, high performing people are the foundation that leads to sustainable success. Great people need great leaders to guide them; thus, the goal of every company must be to ensure that leadership is not only top notch, but developed in all areas of the organization.

Know How Your People Feel
A few short years ago a poll of U.S. employees by staffing agency Randstad revealed that 86% of employees felt their happiness on the job depended on employers letting them know that they were valued.

I have wondered how well companies are performing in relation to this expressed employee need. Sadly, recent statistics still indicate that approximately 70% of people are actively or passively looking for other jobs. So, it’s fair to conclude that companies could do a much better job of letting their employees know they are valued.

It would be easy to point the finger at employers and assume that they don’t care about their people. But we probably ought to look more closely at what employees mean when they say that their happiness depends on their employers letting them know that they are valued.

One obvious way that employees feel valued is in the compensation they receive for the work they do. But as one HR study after another show, compensation is not THE driver of a strong retention culture.

Great compensation and benefits are important, but in the end, people choose to stay with their organizations for many more reasons than money. Here are just a few:

Encourage ideas and contributions.
Time and again, employees express the desire to make a meaningful contribution at work. As individuals each wants to participate and contribute in ways uniquely their own. This requires that management adopt a lead and coach attitude, nurturing employees’ creative talents, rather than trying to force everyone into a “one size fits all” approach to getting the work done.

Invest in Management Development.
People continue to leave bad bosses and with the talent pool tightening, you cannot afford to have managers pushing your talented people out the door. With people still saying that the number one reason for leaving their jobs is a negative relationship with the boss, it’s clear that we still have a long way to go. Engaging disengaged employees and retaining top talent requires that the people given management positions have the strengths and skills needed to do the job.

Provide clear expectations.
Define the required results and then let good people do their work. Managers who rule from a place of fear and insist on micro managing will only find that they lose good people. Within reasonably established boundaries, be willing to let people tap their own unique and creative ideas to come up with innovative approaches to their work.

Invest in career growth & development.
A commitment to offer ongoing training and development is an afterthought for far too many companies. Competition for talent is tight and it’s going to get tighter. When you invest in your people they will be more engaged in their work and more likely to stay with your company. In an increasingly complex multi-generational work environment this becomes even more important. Younger workers in particular expect their employer to help develop their professional skills. If you don’t, they move on to someone who will.

Provide an Environment that Encourages Work/Life Balance
Rightsizing, downsizing, tight economy...whatever it is…people are asked to do more with less. And they acutely feel the pressure to perform when layoffs occur and they remain behind. It is very important to provide employees the support they need when stress becomes too much and leaders must model balanced behavior themselves. If they are sending emails to employees in the middle of the night, while professing the need for work/life balance, I’m pretty sure that employees won’t believe a word they have to say.

Show appreciation often.
I recently read about a manager who actually believed that saying thank you for a job well done wasn’t necessary. In his mind, receiving a paycheck is all the thanks an employee needs. That sort of attitude does one of two things: it drives people away altogether, or gives them an incentive to do only the minimum required in their job. Either way, the company suffers.

If you want people to be engaged, to care are about the success of the business, and to contribute than the minimum expected of them, say thank you — and sincerely mean it. If you don’t, someone else probably will. The fact that employees still reveal in surveys that they want to be valued and often feel that they aren’t, suggests there is much work to be done on the retention front.

Finally...
In the war for talent, companies that care about their people, invest in their development, prepare employees to succeed as managers, set clear expectations, offer opportunities for increased responsibility and advancement, and say thank you for a job well done, are well on their way to creating a superior retention culture.