What if you made your employees eligible to become free agents every three years?
Before reacting to the “insanity” of actively encouraging employees to shop around (which, let’s face it, many of them are doing already), Andy encourages us to consider the benefits that an “open” (and, I would add, potentially mutually beneficial) process might bring to the table. With this in mind, Andy highlights a number of possible outcomes of a regular free agency period:
- The employee shops their skills around to competitor organizations to get a true sense of their value.
- The employee negotiates a new (better) deal with their current company and agrees to stay.
- The employee finds themselves a better deal and jumps to a new company.
- An employer has the opportunity not to “re-sign” a particular employee.
“Resetting” the relationship
I would add another, implicit in Andy’s points above: the employer and employee have an opportunity to “reset” their relationship. A chance to assess the employee’s skills and interests against the organization’s current business and talent needs, to ensure that internal opportunities which may better fit the employee’s capabilities and aspirations are identified at the same time that he or she considers what the outside market might have to offer, and to reset the pay arrangement based on the employee’s current relevant skill set.
A reset like this could also open the door to bringing the concept of skill-based, person-centered pay into the picture as well.
Administrative challenges? Yes, I can think of quite a few. But there are also a number of benefits, benefits that could be particularly significant for those organizations whose success hinges increasingly on continuous learning and new skill acquisition in its workforce.
Employees have a regular chance for an outside reality check (where many may find, as Andy notes, that the grass isn’t necessarily greener outside their current gig). The regular reset opportunity would also create an incentive for motivated employees to keep their skills current and pursue ongoing development of new ones. It also brings the possibility of consequences for those who allow their knowledge and skills to languish.
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A better approach?
And, frankly, it could lay the foundation for a more agile, reality-based salary management approach than the current salary review process combined with a flurry of ill-defined market adjustments that many employers need desperately to escape.
High potential, top performers would likely find such a process to be very exciting and rewarding.
As Andy notes, even if the implementation of a true free agency program might be more than many employers can reasonably pull off, the notion of forcing an honest, transparent and regularly scheduled check-in on an employee’s skills, choices and value has real merit – and should find its way into all our reward programs.