The Conference Board, economists and demographics researchers all agree on one thing – the United States is on the verge of an enormous and lengthy labor shortage. Aging baby boomers, changing immigration policies and significant skill gaps are creating an unprecedented opportunity for organizations across multiple industries and geographies.
Then there are factors internal to the business that compound the problem:
- A relatively universal focus on cost containment means that salary increases tend to be slim or non-existent.
- Flattened organizational structures result in fewer opportunities for advancement than in the past.
- Investment in new technologies to improve efficiencies and the bottom-line require ever-evolving worker skill sets.
Yet, given enormous internal and external shifts, most organizations have done little to advance their thinking about the value proposition they can offer employees. Frequently, this whole topic is couched in terms of compensation, something that’s inherently limited. But many organizations are re-thinking and re-branding their focus in terms of a ‘total rewards’ philosophy.
It can’t just be perks
In an attempt to balance out escalating benefits costs, slim salary budgets and disappearing promotional opportunities, many human resources professionals have expanded their old compensation focus to experiment with a range of programs, from wellness to work-week flexibility and from nap pods to natural foods. These creature comforts offer a novel differentiator that might liven the conversation with candidates and employees. But these benefits can easily be provided by others, leaving organizations without differentiation in a competitive talent market.
And all of these superficial benefits fail to leverage something that makes a significant difference to the employee and organization alike – learning and development. Given the war for talent, now is the time to promote employee development to a prominent role within a total rewards package because it’s actually the most promising and powerful tool we have to support HR and business outcomes.
Research has repeatedly confirmed that one of the primary reasons employees quit is that they believe they’ll be able to grow more elsewhere. In research I conducted last year, compensation and promotions were at the bottom of a 15-item list of workplace priorities. And guess what was in the top three for millennials and generation X workers? Growth and learning! However, despite its importance, most organizations forget about this vital employee benefit and, in the process, fail to take advantage of a total rewards philosophy.
This represents a tremendous missed opportunity for managers and supervisors as well. Since salary, vacation days and benefits are beyond the sphere of influence for most frontline leaders, they feel powerless to make changes. But when employee development is a prominent element of the total rewards package, suddenly these leaders are able to use growth and learning as a motivator as well as a recruiting and retention tool.
Learning and development as part of total rewards
What’s required to make employee development a more visible part of a total rewards philosophy? Three things!
- Lead with learning. List employee development first in all marketing materials. This sends a powerful message to those inside and outside the organization about the value that’s placed upon growth. And it de-emphasizes some of the more fixed or limited benefits.
- Develop leaders to develop others. A total rewards philosophy that elevates learning above salary demands that leaders at all levels be prepared to enthusiastically partner with employees to help them grow. It’s essential that managers and supervisors be skillful at engaging in development conversations, planning, and coaching.
- Show them the money. Legitimately promoting employee development to become a genuine element of a total reward package isn’t free. Budget must be set aside to back up the commitment to growth and learning. But let’s face it, this might be the most self-serving investment an organization makes in others – because it also yields more skillful and productive employees who’ll contribute more.
Organizations that take these actions will allow employee development to step out of the shadows and take its rightful place as a prominent player in today’s new total compensation package.