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Ep 550: Promotion, Motivation, Commitment and Retention

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Attitudes to work are more complex and varied than ever, making identifying trends and patterns harder. There are currently critical questions around retention and productivity that employers need to understand. So, how can we make sense of our ever more complex motivational drivers and attitudes to work?

ADP have access to massive human capital management datasets, and by combining this data with qualitative research, the ADP Research Institute is helping to shine a light on complex questions about work.

ADP Research Institute has recently launched a new quarterly workforce report called Today At Work, and my guest this week is Ben Hanowell, their Director of People Analytics Research. As well as looking at patterns in worker sentiment, the report has revealed a surprising inverse relationship between promotion and retention.

In the interview, we discuss:

• Using data to make sense of the labor market

• The vital importance of retention

• The Employee Motivation and Commitment Index

• The impact of promotion on retention

• Implications for talent acquisition

• Why having a good bench is important

• Individual contributors vs. manager

• Why career development doesn’t end with promotion

• Motivation and commitment are a state, not a trait.

Listen to this podcast on Apple Podcast.

Transcript:

Matt: Support for this podcast is provided by SHL. From talent acquisition to talent management, SHL solutions provide your organization with the power and scale to build your business with the skilled, motivated, and energized workforce you need. SHL takes the guesswork out of growing a talented team by helping you match the right people to the right moments with simplicity and speed. They equip recruiters and leaders with people insights at an organization, team, and individual level, accelerating growth, decision making, talent mobility, and inspiring an inclusive culture. To build a future where businesses thrive because their people thrive, visit shl.com to learn more.

[Recruiting Future theme]

Matt: Hi there. Welcome to Episode 550 of The Recruiting Future Podcast. Attitudes to work are more complex and varied than ever, making identifying trends and patterns harder. There are currently critical questions around retention and productivity that employers need answers to. So how can we make sense of our ever more complex motivational drivers, and attitudes to work? ADP have access to massive human capital management datasets. And by combining this data with qualitative research, the ADP Research Institute is helping to shine a light on complex questions about work. ADP has recently launched a new quarterly workforce report called “Today at Work.” And my guest this week is Ben Hanowell, the director of People Analytics Research. As well as looking at patterns in worker sentiment, the report has revealed a surprisingly inverse relationship between promotion and retention.

Hi, Ben, and welcome to the podcast.

Ben: Thanks, it’s great to be here.

Matt: An absolute pleasure to have you on the show. Please, could you introduce yourself and tell everyone what you do?

Ben: Hey, everybody. My name is Ben Hanowell, and I’m the Director of People Analytics Research at ADP Research Institute.

Matt: Why don’t you tell us a little bit more about what you do in your role?

Ben: Yeah, so as the Director of People Analytics Research, what I do is I use ADP’s payroll and HR data, along with public data sets and other third-party datasets, to really try and understand the labour market and also to understand more broadly the world of work. And at ADP Research Institute, we also have psychologists who design surveys that we use to try and understand the thoughts and feelings that people have about the workplace. We try to put those two data sets together to generate insights that we hope will be useful for business leaders, for HR practitioners, like people in talent acquisition for example, and also for policymakers and even members of the workforce.

Matt: Now, you’ve just published a report called Today at Work. Tell us about that. Is this a regular report? What’s its aim and how did you go about developing it?

Ben: Today at Work, it’s a quarterly report, and every quarter we focus on a different topic about the workplace, and it combines two rich data sources to try and inform, again, those decisions that business leaders, people in HR, policymakers, members of the workforce are making about the workplace. And the first of the two rich data sources we use in this report is, as I said, ADP payroll and HR data that represents about 25 million US workers in any given month, the data set that we use. The second data set we use is actually our monthly worker sentiment survey, and so far that sentiment survey, we’ve gotten over 52,000 responses from workers in the US to these surveys. And the surveys that we design, they are formed by over a decade of international HR research by my colleagues.

Matt: So, in the most recent Today at Work, you’re focusing on how promoting employers might impact employee retention, but you’re also looking at a new way of measuring employees motivation and commitment to their employer. How do you sort of tie those two topics together? Why would they be in the same report?

Ben: Yeah, well, listen, one of the biggest assets, but also biggest costs for any business are the people in their workforce. And that’s probably why throughout my own tenure career as a workforce analyst, employee retention has always been top of mind among the company’s leadership, So the word “recruiting” is in this podcast title, so from a talent acquisition standpoint, retention is really important because of recruiting costs, backfilling costs. So, the question becomes– first off, how do you measure the motivation and commitment, the allegiance that workers have to their employer? And that’s what my psychologist colleagues have done. They’ve used our monthly worker sentiment survey to develop this Employee Motivation and Commitment, or EMC Index, and they found that it’s related strongly to workers intent to leave their employer and to their self-reported productivity, and so it’s measuring something important. So that’s the question about how you measure the motivation and commitment among workers. But then again, how does it tie into this other study we did, which is of the impact of promotion on retention?

And actually, it’s a funny story. I was talking with my boss, Nela Richardson, the Chief Economist at ADP, and we were discussing the EMC index, and we were talking about our own experiences in the recent past. Before I came to ADP Research Institute, I had myself just gotten promoted. And I used that promotion– Getting that promotion, it made me feel more motivated because I was being recognized for excellent work. And that’s actually part of the EMC index. It measures in part high– knowing you’ll be recognized for excellent work. But at the same time, it also let me know that I could maybe use that promotion as leverage to get another job elsewhere. And so that’s the tie in. There’s two sides to the promotion coin, and that’s why we decided that we also wanted to take a look at how promotion impacts retention because it’s a signal of an employer’s commitment to you, so you may be more committed to that employer, but again, you might feel that you’re as marketable as you’re ever going to be at that moment too.

Matt: That is the real standout finding in this report. Basically, what you’re saying is that people are actually more likely to leave their employer in six months after they’ve been given a promotion than they would if they weren’t given a promotion. So, what are the implications here? Should employers stop promoting people? Is that the answer?

Ben: No, [chuckles] don’t stop promoting people. Promote people through the management ranks because if you have people who don’t have any manager who can make them feel supported to do the work that they need to do, then you’re going to have a bigger retention problem, than just the promotion impact. So, yeah, keep promoting people, okay, please. But what does this really mean? I’ll break it down in two steps.

So first, why is this not so big of a deal that we need to just stop promoting people? And second, what should we do in light of these findings? Yes, the promotion increases the risk of leaving for the first six months, but it actually slightly decreases the risk of promotion in the three months after that. And so, all told, employers on average, they lose only about 14 days of productivity in the nine months that follow every first promotion that they award somebody.

So, 14 days, that’s not enough to say, let’s stop giving people promotions. But it is enough to start thinking about how you might improve the retention of promoted workers, for sure. It really means employers need to support the employees they promote as they take on new responsibility because career development, it does not end when someone gets a promotion, clearly. In some sense, it’s just the beginning. But, also think about this, employers need to make sure that they’ve got a good bench, is what we like to say. If you think about your workforce as a team, you need to have another star player who’s ready and willing to take the place of somebody if the person you just promoted decides to go somewhere else. And that good bench is about recruitment. You want to always make sure you’re recruiting the right people so that you’ve got multiple people who could take a leadership position, but it’s also about developing your workforce who’s already there.

Matt: I think that’s really interesting, especially interesting that first part about how do you help newly promoted people? Because I think for many employers, giving someone a promotion, that’s an incentive for them to stay. But it’s very interesting that actually the opposite is the case.

Ben: Well, as I said, it’s really a two sides of the same coin situation. Those workers who decide to leave, who are more likely to leave after getting that promotion, they may in fact feel more motivated and committed to their employer after they get that promotion. It’s just that they also have more job opportunities because they’ve been promoted, so it’s really like that.

Matt: And whose retention does promotion impact more? Is it individual contributors or managers?

Ben: It’s managers for sure. I told you that employers on average lose about 14 days of productivity in those nine months that follow the promotion. If you break it down by individual contributors versus managers, what you see is that managers in aggregate, you lose about 19 days of productivity from them. But from individual contributors, you actually gain some days of productivity by promoting them. Now, does this mean that you should only promote individual contributors into leadership positions and not mangers? No. What it does is it tells us that a promotion can mean something different depending on somebody’s situation.

What I mean by that is you think about an individual contributor, they have just got promoted through the management ranks for the first time at your company, it’s potentially a signal to them that they might be able to develop their career with you before deciding to play the field. But if you’ve got a first level manager, you’re promoting them to a second level manager, a position with higher or more scope than they have now. It’s a signal to them that maybe it’s time for them to become a free agent.

Matt: When it comes to job requirements, education, training, relevant experience, what jobs are most impacted by promotion?

Ben: Yeah, the jobs that are most impacted by promotion in terms of the requirements of the job are those jobs that require little or no preparation, sort of a secondary school diploma or equivalent. Just to put this in perspective, for people with working jobs that require little or no preparation over that nine month period following the promotion, an employer loses about 85 days of productivity from them. But if you look at people working in jobs that require considerable preparation, we’re talking a college degree you lose only about 12 days of productivity over that nine month period. So that’s a big difference.

Matt: Any insight into why that might be?

Ben: I think that there’s at least two possibilities. First, when you promote somebody who is working a job that doesn’t require any advanced degree or any college degree whatsoever and you put them into a position of leadership, that is perhaps one of the few things that they can use to develop their career. And they may have to develop their career elsewhere if there aren’t enough opportunities with their current employer. Does that make sense?

Matt: Yeah.

Ben: The other thing that might be going on is it might go back, remember I was saying that career development doesn’t end when somebody gets promotion, in some cases just the beginning. So, ideally, an employer will have a support system to try and to help their newly promoted employees develop the skills that they need in order to take on this new responsibility. Perhaps for those jobs that require little or no preparation, there’s less of that support than you would have say for a software developer who just got promoted to a software development manager. So that’s another thing that might be going on is that people working in jobs that require little or no preparation get the least support in terms of taking on that new responsibility and so they get burnt out and they leave.

Matt: Kind of by way of summary, what are the ultimately are the key lessons for business leaders, HR decision makers and talent acquisition leaders from all of this data? What should people be focusing on? What should they be thinking about?

Ben: Yeah, so it goes back to first, recognize that career development doesn’t end when somebody gets a promotion, in some sense, that’s just the beginning, that’s number one. Number two, make sure that you have a good bench so that if somebody on your management team leaves right after you promoted them, you’ve got somebody else ready and willing to take their place. And third, going back to that result that we just discussed about job requirements, really think about whether or not folks at your front lines are getting enough support to take on the new responsibilities that you’re giving them if you promote them into management.

Matt: Moving on to the other part of the report, the Employee Motivation and Commitment index, what are the key takeaways there for employers?

Ben: Sure. So, when it comes to the EMC index, one of the things that we found is that it varies widely depending on worker circumstances, depending on the industry that they work in, depending on their self-reported productivity. It varies depending on the type of work they do in their workplace situation. And what this is telling us is that employee motivation and commitment, it is more of a state that you are in based on the circumstances that you were in. And it is not a trait that you either have or don’t have. You’re not just somebody who’s– We don’t live in a world where somebody is either committed and motivated at work or they’re not forevermore. And that means employers are in a position to influence the degree to which their employees are committed and motivated in the workplace. Some employers understand that point more than others, and we really hope this report will bring those others along.

Matt: Tell us more about the ongoing series. How often is this report going to come out? And finally, where can everyone listening learn more about Today at Work.

Ben: Today at Work report comes out every quarter, and every quarter we focus on a different topic. To give you a sneak peek, our next report might cover stress in the workplace, for example, and we might come at that from two different angles. Again, from the worker sentiment survey and using ADP payroll and HR data. So, quarterly series, different topic every quarter, and you can find this report at adpri.org, our website, where you can also subscribe to get email updates. And you can also find at our website, adpri.org, all of the other great work that we do at ADP Research Institute.

Matt: Thank you very much for talking to me.

Ben: It’s been a pleasure. Thanks a lot.

Matt: My thanks to Ben. You can subscribe to this podcast in Apple Podcasts on Spotify or via your podcasting app of choice. Please also follow the show on Instagram. You can find us by searching for Recruiting Future. You can search all the past episodes at recruitingfuture.com. On that site, you can also subscribe to our monthly newsletter, Recruiting Future Feast and get the inside track about everything that’s coming up on the show. Thanks very much for listening. I’ll be back next time and I hope you’ll join me.

[Recruiting Future theme music]

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