What keeps your employees happy? It's not the money
Although the Middle East suffers from high unemployment rates, Arab startups often also find it difficult to retain employees.
For some startups, macroeconomic factors or political stability can make retention a challenge; for startups in the Levant, it can be difficult to keep employees from heading to the Gulf for higher salaries. This was the case for startups like TakTek, a Jordanian gaming company, that tried to retain its excellent developers by offering bonuses and stock options, but ended up losing too many to stay in business. However, this isn't the only factor that drives employees to leave. For many global firms, and for many in less volatile markets, however, the major incentive is not money.
A report by management consulting firm McKinsey, which surveyed 1,047 executives, shows that employees are better motivated when offered non-monetary incentives such as praise from the line manager, attention from leaders and a chance to lead projects.
When asked what incentives (monetary and non-monetary) they considered effective, the majority of respondents preferred praise (67%) over bonuses (60%), attention from leaders (63%) over a salary increase (52%), and opportunities to lead (62%) projects over stock options (35%).
The core conclusion? Engaging your employees and giving them a chance to be a core part of the team is a great way to keep them motivated and make them feel appreciated.
It's also cost-effective. After conducting interviews with HR executives, McKinsey concluded that many companies have cut remuneration costs by 15% or more.
Aside from what’s mentioned in the report, there are other non-monetary methods to retain employees at your startup; here are a few:
- Conduct ‘Stay Interviews.' Many companies conduct exit interviews with resigned employees to know the reasons they quit. This doesn’t help the company avoid turnovers however because it’s already too late. What helps is conducting interviews with employees who didn’t resign and ask them why they are still with the company, what would drive them to leave one day and what are the things that they like to improve. This is called a "stay interview," and it will make managers anticipate an issue before it happens.
- Contests. Nothing is more exiting than throwing a competition that will push your employees to challenge themselves. It will spice up the environment and add fun to the work experience.
- Give a birthday leave or organize an outing. If you choose not to give your employees a paid leave on their birthday, you can always organize a post-work outing to celebrate the occasion. This is a definite ice-breaker, especially if you have new comers. If you can afford it, set aside a small budget for regular outings where you can take your employees out for bowling, dinner or movies.
- Know your employees before they become your employees. You can tell from a job interview if the person is passionate about your startup or simply about your money. Ask them why they quit their previous job. Make sure they are aligned with your vision and they have the proper startup culture to fit in.
One extreme way to ensure they fit the culture is to offer monetary incentives to leave. To make sure only passionate employees stay onboard, Zappos offered new hires 1,000 dollars to quit. Would you be willing to pay this much to weed out ‘headache’ employees?
It can be hard for managers and entrepreneurs who are leading a company to invest heavily in team building, but it pays off in the long run; after all, a company is no better than its team. TakTek founder Gaith Kawar decided to overcome his challenge by building what the startup needs into its founding team, he told Wamda in a previous interview.
The most important thing here is to know what your company values are, and what your employees want. Don’t offer them a bonus or a raise when something else not related to money is demotivating them; offer it when they have proven to be motivated enough to earn it.
How do you retain your best talent?