Attracting and Retaining Talent
Rowena Crosbie Mar 3, 2023 | 12:57 pm
1 min read time344 wordsBusiness Insights Blog, Training & Development
BY ROWENA CROSBIE, president, Tero International
One branch of behavioral economics seeks to understand how incentives influence behavior. In his excellent 2019 book titled “Loonshots,” author Safi Bahcall provides examples of how skewed financial incentives contribute to troubling outcomes.
One such example relates to childbirth. Bahcall says that since 1980, the rate of cesarean deliveries in the United States has doubled, making C-sections the most common surgical procedure in the country. In the U.S., nearly 1 in 3 births is delivered by C-section, far above the 10-15% range cited as guidance by the World Health Organization and the Public Health Service.
Behavioral economists report that physicians and hospitals are often paid more for C-sections than for vaginal births. One study found that the greater the difference in pay, the higher the C-section rate.
This disturbing connection between incentives and behavior is not limited to health care procedures. Leaders must be thoughtful and contemplate the unintended consequences of financial incentives.
At a time when talent is the biggest concern for employers, money alone won’t win the race. Leaders have a lot of options to choose from in how they invest in talent. Will they pick financial compensation? Benefit programs? Perks? Helping employees grow and learn?
More and more organizations are voting for learning, and their investments are paying off.
Historically, training was provided to positively impact business performance. What has escaped attention, until now, is the positive impact of training on the individual.
Lack of career growth and lack of development opportunities are among the top cited reasons employees quit their jobs. Employees who are very satisfied with their career development are more likely to stay.
Training demonstrates an organization’s commitment to employees and their careers. When employees see the investment made in them, it has a powerful impact on performance and motivation. Professional development is rapidly eclipsing salary as the most effective way to attract and retain talent. Pay increases serve as a short-term fix. Developing employees delivers long-term positive value for employers and employees alike.