This post originally appeared on Forbes
With unemployment at record lows, companies are competing more than ever for top talent. When someone can work pretty much anywhere, what is it that will entice them to come work for you? The obvious answer, of course, is money. But survey after survey finds that pay and benefits are actually low on employees’ lists when measuring what makes them most engaged at work.
A Gallup poll from last year found that less than 40 percent of “fully engaged” employees would consider leaving their job even for a raise of 20 percent, and employees ranked money fifth on a list of six forms of recognition for their work. Another analysis of nearly 100 studies on the topic found only a 2 percent correlation between pay and job satisfaction—implying that employees’ engagement is mostly independent of how much they make.
So if it’s not money, then what does make employees engaged? For lack of a better term, they are looking for self-actualization. Rather than waiting for the pot of gold at the end of the rainbow, employees, and particularly millennials, are seeking a sense of purpose and meaning in the short term, and something that will set them up with the skills to do what they love in the future.
That trend represents a sea-change from 25 years ago when the assumption was that once you got hired, you did as you were told, stayed as long as you could and got paid increasingly more money to make it all worth it.
So how can employers attract good people and keep them engaged under those circumstances? By empowering individuals, building teams and connecting them to a shared sense of purpose.
1. The old-school way of incentivizing employees was to get a pool of money to divvy up for bonuses, giving the lion’s share to those who were most successful in achieving their goals. But truly empowering employees means giving them the room to try things and fail, and then rather than punishing them, analyzing the reasons for failure so they can get it right next time. Over time, that sense of empowerment creates a feeling of purpose, causing employees to feel like they are making a difference. So, the new way to empower individuals? Reward them as much for their failures as for their successes—so long as they learn from their mistakes. We only grow and try new things when we are able to take risks.
2. Engaging employees means building teams of people who are able to rely on each other rather than competing for the share of the credit. That requires communicating honestly, or as I like to call it, being aggressively honest and aggressively supportive. As a team leader, it’s imperative to set a tone of empathy that lets people voice genuine criticism, but at the same time feel like their opinions and advice matter. An old-school behavior may be to say, “we always bail out the sales team, but they get all the credit.” A more team-building way of thinking is, “I believe in our mission, and I need to be there to take the hand-off from sales every time.”
3. Once employees feel empowered to act and feel supported by others, they need to feel like their efforts are part of something larger. Connecting them to a shared sense of purpose entails helping employees understand that they are part of an ecosystem that without their contributions may not succeed. A call center employee, for example, might feel like their work is drudgery, but if they realize that answering the phone in an empathetic and supportive way helps transmit the values of the company to its customers and ensures its success, then they will feel more personally engaged in the work that they do.
Today’s valuable employees feel like the values of the company are as important as its performance. In fact, the values come first—and ensure performance. If the only thing that matters is the stock price or top-line performance, then people may feel great in good times but not so connected when numbers are slumping. And that’s what makes people define success only based on the money. Even more important than being able to recite the mission statement or articulate the values of the brand, however, is for employees to feel like they are integral in achieving those goals. In the end, that is often far more satisfying than take-home pay.