The current labor shortage and the struggles for employee loyalty are an issue for companies. Many executives strive to attract and retain the workforce they need.
A combination of factors has made the workforce inadequate to fill the jobs available: job termination hits historic highs, immigration declines, and fewer people of working age (aged 16 to 64). This labor shortage started before the COVID-19 pandemic and is expected to continue for some time.
And then there are those who have a job but are not satisfied with it. A recent survey found that more than 40% of people are considering quitting their current job this year. The pandemic has caused many people to reassess their working life and willingness to accept.
Increasing wages and offering attractive benefit packages are the most important and traditional tools employers use to attract and retain qualified employees.
In this new environment, however, employers should not limit their considerations to purely financial compensation. The topic of “emotional balance” is becoming more and more important and is valued by employees.
In the nearly 20 years that my colleagues and I have studied and helped leaders, we have learned that increasing emotional compensation is based on fulfilling seven universal human needs in order to be successful at work: respect, recognition, Belonging, Autonomy, Personal Growth, Meaning, and Progress. The resulting bond through the fulfillment of these needs arouses positive emotions and gives us the feeling of being connected to our work and our colleagues.
The most effective leaders know that a high level of emotional balance benefits both the individual and the organization. Leaders who cultivate a culture of connection by conveying an inspiring vision, valuing people and giving them a voice will meet the seven needs. In return, they will unite employees and foster a relational environment that helps people do their best work.
Costco’s “doing the right thing”
Costco attracts employees, engages them and keeps them at a level they envy their competitors. Not only does it pay workers at the top end of the wages and benefits for its industrial sector, but it also cultivates a culture of connection that evokes positive emotions. Not surprisingly, Costco ranks 4th on Forbes / Statista America’s Best Large Employers 2021 list, topping the retail and wholesale category. Costco has consistently been in the top 5 on the list for years. Clearly, Costco executives are doing something right.
Jim Sinegal, a co-founder of Costco, once told me that the Costco culture can be described as “doing the right thing”. By that he means Costco:
- Obey the law
- Takes care of its members (i.e. customers)
- Takes care of his employees
- Respect its suppliers.
Costco rewards its shareholders for adhering to these standards. It’s a win-win for all parties.
Costco employees take pride in working for a company that does the right thing. They know that Costco executives value them as individuals, and not see or treat them as a mere means to an end. Costco promotes from within and invests in apprenticeship-like training in order to develop employees and offer them opportunities for advancement.
It also gives employees a voice to share their ideas. Speaking at Costco’s annual managers conference for a year, I saw video after video of employees from warehouse club locations around the world proudly sharing their ideas on increasing efficiency, reducing costs, and improving the member and employee experience. These aspects of Costco’s work culture increase the positive emotions of employees.
I wrote in this section about how Costco is realizing its vision that could help you along the way of your business.
Costco is just one example of executives and organizations that increase emotional compensation by cultivating attachment cultures, as I have documented in my book “Connection Culture”. These include Oprah Winfrey as head of her media company, Tricia Griffith of Progressive Insurance, Alan Mulally as CEO of Ford Motor, Adm. Vernon Clark of the US Navy and Steph Curry and Steve Kerr of the NBA basketball team Golden State Warriors basketball.
Positive emotions at work are particularly in demand today
The Gallup organization’s “State of the Global Workplace 2021” revealed the following:
- Negative emotions among employees worldwide have been increasing for years and will reach record levels in 2020
- 7 out of 10 employees currently have problems or suffer from them
- 80% of employees are not engaged or take no action at work
These statistics may sound grim, but executives should view them as a great opportunity.
People yearn for more positive workplace cultures. There is evidence that emotional compensation is highly valued by employees. Getting out of the pandemic is a natural time to make improvements, especially since we learned from COVID-19 why relational connections are so important.
Given the economic and emotional benefits of working for leaders and organizations that cultivate a culture of connection, it’s no wonder that companies that pay well and offer emotional compensation are becoming the employers of choice in their industry. Connected, engaged employees are more collaborative, innovative, and productive. Executives and organizations that get the emotional balance right will gain a competitive advantage.
Michael Lee Stallard, President and Co-Founder of Connection Culture Group, is a thought leader and speaker on how effective leaders promote human connection in team and organizational cultures to improve the health and performance of individuals and organizations. He is the author of Connection Culture and Fired Up or Burned Out.
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