Money, Motivation, and a Mobile Workforce

Economists warned the impending doom that an employee exodus would bring as the recession waned and the job market started to open back up; and guess what, research is indicating the beginning of that exact trend.  According to the Bureau of Labor Statistics, more people in the month of March 2010 voluntarily left their jobs than were laid off, a trend reversal from the previous two years.  This has been interpreted by economists to show that confidence in job prospects are improving and people are no longer viewing the economy with a “well, at least I HAVE a job” mentality.

According to other studies, as of the end of 2009 as much as 60% of the workforce was either actively looking for another job or had plans to leave, a staggering statistic for most employers.  And even more discouraging for some employers is it may be too late to save many of them. 57% of respondents on a survey indicated that there was nothing their employer could offer them that would convince them to stay.

So what does all this doom and gloom mean to you as an employer who doesn’t plan on leaving?  Well, if you are a recruiter, it means job security…and a lot of work for contract opportunities.  If you are a leader trying to maintain people at your company to keep it running in a profitable direction, then here are some things you need to start doing and doing in earnest.

Have “The Talk”

Depending on your relationship with your current employees it might be beneficial to know if your people are looking.  Some may tell you, and some may not, but most likely if they are willing to tell you, you might have a chance to save them.  In cases where you can save them, do the math on what it will take.  And I mean DO THE MATH, not just as a figure of speech but actually calculate what you feel you will lose in productivity from their loss, the cost of hiring temporary labor, training, recruiting, and diminished productivity from an unseasoned replacement.  Depending upon the position and how specialized it is, it could coast you anywhere from 150% to 600% of the person’s salary long-term.  Starts to make that 10% raise they want look rather paltry, doesn’t it?

Save the ones you can

If you are one of the many companies that laid-off people then had to do pay cuts as well, then your company has been surviving at the hands of the overworked and underpaid.  If these people on are on the fence whether they will stay or not, paying for their hardwork should be a priority.  As soon as you start to see recovery happening, invest in your greatest asset, your employees.  Payroll typically is the largest associated budget item with being an employer, yet, more care and consideration goes into product or service development, than into your largest investment.  What good is a new capital development or strategic initiative if you are mired in delays caused by a talent shortage?

This may not be cheap but it will be cheaper in the long run for crucial positions.  Recruiting for specialized roles can cost several times the annual salary for those positions.  According to a survey done on, a website specializing in $100k+ jobs, indicated that at least 50% of respondents were looking for a 15% raise to improve their job satisfaction.  20% or responses indicated a raise of 20% or more as a requirement to be re-energized in their role again.

Cut your losses

For the people who have quit but have not left yet, see how you can help them find something new.  If you can’t save them, you might as well give them a little incentive to keep working hard until they find something else.  If you simply fire them or find a way to get them out on negative terms, now you have a more rapid vacancy and you have to overburden the remaining workers (further perpetuating burn out).  While it seems counter intuitive to some, helping them find a better opportunity could be the best thing for both involved, both short and long-term.  Remember, they plan to leave anyway, treat them with respect and you may get the same back.  And in the meantime, you can start your search for their replacement and perhaps even have some knowledge overlap where they are training their replacement.

Looking ahead

So how do you start to plan for the end of this recession and what have we learned about employee engagement during times of difficulty?  One thing we have learned is that money may be a motivator to stay but it is not the only motivator, and it certainly does not mean engagement.  Many employees are quitting voluntarily and staying within the same salary range.  This may suggest that when your employees say “I’m not getting paid enough to put up with this stuff”, the complaint is more about the “stuff” and less about “getting paid.”  If you couple this with people’s indication that they would stay for a certain amount of money, it may suggest that money might be a good form of recognition of prior performance but not motivation for future performance.

Further evidence that employees are looking for more than money is the trend of many people moving into the non-profit sector.  According to Dan Pink, while money is a motivator, you only have to pay enough to take the issue of money off the table.  Money does not lead to better performance, on the contrary, several studies done at M.I.T. and by the Federal Reserve Bank show that higher monetary rewards actually lead to poorer performance.  According to his research, Dan Pink determined there are three factors that actually drive performance, Autonomy, Mastery, and Purpose.  So assuming we get new people or pay our current people enough so that money is off the table, here is are things you can do that might help.

Give them autonomy

Autonomy is the desire for each individual to have a certain level of self-direction, to spend time and effort as we choose.  This is where traditional management approaches get in the way of employee performance.  Management is great if you want compliance or simple task completion, but if you want innovation, creativity, and complex process performance, then autonomy is the way to go.  Best Buy recently conducted an experiment that was deemed a “Results Only Work Environment” or ROWE where the time clock was abandoned and people were only held accountable for achieving certain results.  What Best Buy encountered was a decrease in voluntary turnover from 22% to 2% and a 35% increase in productivity across departments that enacted ROWE.

Help them get better

At what, you ask?  Whatever!  Mastery is the personal desire to get better at something, anything.  Sometimes it has to do with work and sometimes it doesn’t.  But if work assists you in getting better at whatever it is you are looking to improve then it can act as a motivator.  Support for this comes from multiple places, most historically from Abraham Maslow and the theory of the Hierarchy of Needs.

The basic premise of Maslow’s theory is there is a hierarchy of what people are motivated to satisfy.  The most basic of the needs are physiological needs: shelter, food, clothing, etc.  The second level of Maslow’s hierarchy is a need for security: physical and emotional safety.  These types of things can be provided through retirement or 401k, adequate insurance, etc.  The next levels include a need to belong or have group identity; then comes self-esteem, and finally self-actualization.  The first two levels of Maslow’s hierarchy can be accomplished with money.  I can meet my physiological needs and security needs if I have enough money, but money does not buy a sense of belonging, high self esteem, or actualization.  Further support that money is only a factor until people feel they are paid “enough.”

Mastery is the idea of self-actualization.  How can we become who we always wanted to be? Or how can I at least get better at being who I am?  Maslow and Pink both agree that people are driven to see what is next, what is possible.  This can be in very philosophical terms of seeking enlightenment, or it could be to buy a bigger house, or learn the guitar, or finish a degree.  Mastery is simply people’s desire to see what else they are capable of.

Make it mean something

Lastly, give them purpose.  Give them something to believe in outside of a quarterly goal or monthly incentive.  Engagement levels are dropping in the workplace but rising in Non-profits.  This is a direct contradiction of the notion that money motivates –it doesn’t.  People work hard for an idea or cause they believe in.  The will only work “hard enough” if it is something they are told to believe in.  How does your organizational mission mean something to the values of the people who work for you?  If you can’t make the connection, then the likelihood is you people can’t either.

Now is the time

The Department of Labor released another report suggesting that employee burnout is at an all time high.  Over the last 2 years employee productivity (the amount of output per employee) has risen 6.6%.  In the same amount of time, compensation has dropped 5.9%, which means for the last two years employees have been doing more work and received no additional compensation for it.  This obvious disconnect can easily lead to a cynicism within the workforce resulting in a belief that “hard work only gets rewarded by more work.”


Employees are demanding a change in how the work place looks and they are clearly no longer content to wait and see if your company will do it for them.  The bulk of the generation that is becoming (or has become) your leadership pool and your top talent that still has years left in the workplace, Gen X, is the most entrepreneurial generation in history.  Which means your top talent is not afraid to either find what they are looking for elsewhere or create it themselves.

Engagement and retention are related but not the same.  It is time to stop thinking about employee loyalty and start increasing employee dedication.  I am 100% dedicated in what I do, but I am loyal to myself.  If I feel I am not getting what I need from my employer, whether that is development, challenge, pay, a sense of higher purpose, or independence, you can bet I will find it elsewhere.  You can fight it all you want or sing from the rooftops that it shouldn’t be that way, but if you aren’t giving your employees what they feel they need…you will soon be singing alone.


2 thoughts on “Money, Motivation, and a Mobile Workforce

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