When employee retention becomes employee detention

When you interpret your company’s employee survey data, which social demographic do you normally find has the strongest correlation with employee engagement? In my experience, the strongest correlation tends to be length of service. Unfortunately, it’s usually a negative relationship. That’s right – often the longer employees have worked for your company, the more likely they are to feel disengaged. Why should that be?

No-one is surprised to discover that recent joiners are the most enthusiastic and tend to remain highly engaged at least for their first 2-3 years of employment. You’d expect that to be the case and if the reverse was true, you’d want to take a serious look at your recruitment policy and induction, as well as the competence of your managers. But once employees get to around 6-8 years+ service, disillusionment starts to set in.

By the time employees get to 10+years experience, your sample tends to polarise radically. At one extreme, you have the minority who’ve made it to the top of the pyramid. Such employees should be highly engaged, although as we know, senior managers can be your toughest internal customers due to their very high expectations. At the other end of the spectrum are long serving employees who haven’t made it to the top, but unlike those who exited the business when passed over for promotion, these are the ones who decided to stay put for whatever reason.

Of course, not everyone wants to rise to the top of their organisation, which is just as well; the simple laws of geometry dictate that in career terms, most people stay nearer the base of the pyramid. Employers have to find other means to recognise the contribution that loyal employees make to the success of the organisation beyond promotion and salary increase. That’s where it gets hard. There are only so many sideways moves that employees will accept before frustration sets in. Another solution is to give employees ‘specialist practitioner’ status, in recognition of their depth of experience. But in reality, there are few roles where ten year’s experience is twice as valuable as five year’s experience. All too often, ten year’s experience amounts to one year’s experience repeated ten times.

It gets more difficult when length of service means that the employee benefits cease to be golden handcuffs and instead become a ball and chain. Many long serving employees can not hope to match their benefits in terms of pension (especially, in this day and age, if they are lucky enough to have a final salary pension) and accumulated holidays, even if they could match their salary and bonus elsewhere. Employee retention can easily become employee detention. In this situation, employees can only wait for retirement or redundancy, whichever comes first.

Having many employees in your organisation who are in this situation inevitably has a depressing effect on morale. It’s a scenario familiar to anyone who has tried to create an engagement culture in public sector organisations or former nationalised industries. In reality, no-one likes to feel trapped, but the logic of employee benefits that increase with service means that most employers perpetuate this cycle.

Perversely, when it comes to restructuring, organisations are often reluctant to make long serving employees redundant due to the high cost involved. Instead they will tend to offer voluntary redundancy to recent joiners, which in the long run is always a false economy. (A successful restructuring has to follow the logic of best person for the job, regardless of length of service.)

Is there an alternative to this gloomy scenario? Well of course there is. Leaders who truly ‘get’ employee engagement make all their employees feel valued and continually re-energised, including those who have been with the company the longest. They achieve that by making people feel valued and keeping them in touch with whatever it is that makes them get out of bed in the morning. Organisations who build such leaders are rewarded with employees who love their jobs, who look forward to being with their teammates and who never want to retire. By achieving the right balance of ‘give and get’, employers can reverse the tendency for long serving employees to become disengaged. The nirvana state is to have long serving employees who see it as a privilege to have a job they enjoy that also fits in with their life. In short, a long term employee retention strategy must focus on intrinsic benefits, because financial benefits alone are more likely to result in employee detention.