A few years ago, when the economy was in a deep recession, I wrote a white paper that argued (with passion and purpose) that recognition still mattered. It presented the case for ramping up (and not reducing) employee recognition. My thesis was simple: companies who took the attitude that their employees had nowhere else to go and were lucky to have jobs would be in a bad spot once the economy started picking up again.
I hope you took my advice. The recent jobs reports should be an eye opener for any employer who might have taken their employees for granted. Last month we had our tenth consecutive month of net new job creation. Companies created new positions and opportunities above the 200,000 mark. That type of sustained hiring hasn’t happened since 1995. More importantly, those numbers signal a fundamental shift in the balance of power within the labor market. As employers become more confident and hiring accelerates, talented employees have more options than they have had in years. Organizations that once found it easy to retain people simply because opportunities were scarce will now have to compete much harder for experienced, high-performing workers. The businesses that invested in their employees during the difficult years will be better positioned than those that assumed loyalty would continue simply because the job market was weak.
And don’t look now but wages are starting to rise as well. That’s a strong signal that it’s becoming an employee’s (vs. an employer’s) market, one where it will be increasingly difficult to hold on to good people—especially those who have felt neglected over the years. As opportunities become more plentiful, talented employees gain the confidence to explore other options and compare not only compensation packages, but also workplace culture, leadership, and opportunities for growth. Organizations that relied on a weak economy to keep employees from leaving will quickly discover that loyalty cannot be taken for granted. Employees who haven't felt appreciated, recognized, or supported will be among the first to answer a recruiter's call. In contrast, companies that invested in recognition throughout the downturn will be in a much stronger position to retain their best people because they have already built the trust, commitment, and engagement that make employees want to stay even when other opportunities arise.
Tomorrow is New Year’s Eve. As we gear up for what promises to be a prosperous 2015, leaders responsible for retaining people should be rethinking their attitudes toward recognition. Those that have been rewarding and acknowledging employees all along would be wise to continue in ways that are increasingly more meaningful and relevant. And for those that have ignored employees up to now, my advice is to get busy correcting that. You have a lot of catching up to do. Make more employee recognition your New Year’s resolution!
