The key to retaining your top-performing employees

Believe it or not, bad pay and benefits aren’t the main reasons employees are looking for the exit door. A recent study from Reward Gateway found that only 12 percent of employees leave jobs because of poor pay and benefits.

It makes sense. Employees today face a robust job market where opportunities are strong, with the average voluntary turnover rate at 13 percent, and the unemployment rate hovering around 4 percent. In short: Employees have options, and they’re taking them.

Paying employees well and providing good benefits is only enough to retain employees to a certain extent. According to a recent Deloitte report, forward-looking organizations are focusing on employee engagement (85 percent of business leaders believe it’s a top priority), culture (82 percent of business leaders believe it’s a competitive advantage), and employee experience (79 percent of business leaders believe it’s important to their organization).

Related: 3 areas where employee benefits are out of whack

In today’s competitive landscape where the war for talent never really went away, monetary compensation alone isn’t going to retain your top-performing employees.

Recognition is key for retaining employees

Reward Gateway’s study found that the main reasons employees leave are because their organizations didn’t recognize employees (26 percent) and their organizations didn’t have open and honest communication (19 percent). Now more than ever before, recognition in the workplace, particularly between managers and their direct reports, is mission-critical to retaining employees.

What’s more, more than half of employees surveyed (54 percent) would be prepared to match their words with action, choosing to work for an organization that had a culture of thanks and recognition over one in which there was no praise, but 10 percent more pay. Even more employees (88 percent) were in favor of praise being given in the moment, and a similar percentage reported that managers and leaders should spot and praise good work continuously — the highest rates of all regions surveyed. Frequent thanks was a recurring theme in the results, and it’s a big part of why recognition is imperative for forward-looking organizations.

Recognition drives engagement

According to Deloitte, “high-recognition companies have 31 percent lower voluntary turnover than companies with poor recognition cultures.” But recognition does much more than retain. Several studies have cited recognition as “the most impactful driver of employee engagement,” and The Aberdeen Group found the best way top-performing organizations improve employee engagement is through employee recognition programs.

Emphasizing recognition within organizations drives employee engagement and creates transparent cultures where managers and employees have open dialogue and are in better alignment with one another and their company. With recognition, employees perform better and feel a stronger sense of purpose at work.

So, if you’re worried about your top performers leaving (and you should be), you don’t necessarily have to start with pay raises — take a look at your recognition program. It’s the reason your employees will stick around and grow.

Rob Hicks is group HR director at Reward Gateway. With the support of his People Team, Rob is responsible for Reward Gateway’s people worldwide. He oversees Learning & Development, Diversity & Inclusion, People Operations, Internal Communications and Recruitment.