I’m going to say something that’ll make you uncomfortable, especially if you’ve been throwing raises at people to keep them. Money is the wrong tool for holding onto your best people. It works for about a week, then it’s just the new normal and they’re looking again.
I’m not making this up off the top of my head. There’s a study that tracked this for 25 years, looking at why people actually stay or go. Compensation came in fourth. Fourth. Behind three things that don’t cost you nearly as much.
Number one was being on a winning team. People want to be part of something that’s going somewhere. Your guys can feel when the business is growing and when it’s drifting. If your shop feels like it’s grinding out the same week over and over with no direction, your best people leave, and it’s got nothing to do with the hourly rate.
Number two was advancement and recognition. Folks want to know there’s a next rung on the ladder, and they want to be seen when they nail it. I’ve watched owners lose a great tech because nobody ever once said good job. That’s a free thing you forgot to hand out.
Number three was security. Not just job security, the feeling that the company is run well, that there’s a plan, that the doors aren’t closing because the owner is winging it. People with families need to know you’ve got the wheel.
And then, way down at number four, money. Don’t get me wrong, you’ve got to pay fair. If you’re underpaying, none of the other three save you. But once you’re in the fair range, dumping more money on a retention problem is like pouring water into a bucket with a hole in it. You’re treating the wrong thing.
So here’s what I’d do instead of writing another raise check you can’t really afford. Cast a vision your crew can see. Tell people where the company’s headed this year and what their piece of it looks like. Catch somebody doing it right and say so out loud, in front of the others. And run your business tight enough that your people feel solid ground under them.
Do those three and you’ll keep good people that your competition is trying to buy away with an extra two bucks an hour. And you’ll spend a lot less doing it.
Think about your best person right now. When’s the last time you told them they mattered? Might be worth a conversation this week.