Losing an employee is costly: Gallup estimates that the cost of replacing a team member is usually between half and double that employee’s annual salary. And with average salaries for Product Managers in the US exceeding $120,000 according to Glassdoor, that means the cost of replacing just one Product Manager could be as much as $250,000.
It’s in the best interests of companies in all industries to invest in keeping their employees around. But what if you don’t have the funds available to compete on salary? When times are tough, farsighted employers find other ways to reward, motivate and retain their top talent. Fortunately, these non-salary-related incentives may be just what your best-performing employees have been craving all along.
In order to motivate someone, you must first understand what they actually want. This is a truism of sales, and it applies just as well to employee retention. A market-competitive salary is a given, but this isn’t the only lever that companies have at their fingertips.
Product People Crave Employment That Is…
For the 2022 Future of Product Management report, we surveyed over 5,000 Product Professionals employed at all stages of the career ladder in companies ranging from Fortune 100 giants to startups. The results revealed what Product People really want from their employers. Provided the salaries are competitive and reasonable, Product People most seek out jobs that:
- Are aligned with their values
- Offer flexible working conditions
- Provide a pathway for leveling up
- Train in the skills needed to advance
While flexible working conditions (Hybrid or remote, clearly communicated PTO policies, and a company culture that takes vacations literally) is fairly self-explanatory, the other points deserve some attention. Our research shows that values, training, and clear pathways for advancement are still significantly underutilized by HR and L&D professionals looking to enhance their retention and employee satisfaction.
Alignment With Values is a Matter of Communication
Almost one-third of Product People we surveyed considered alignment with values the thing they found most important when considering whether or not to move jobs. While some industries, particularly R&D, Healthcare, and the non-profit sector, lend themselves intuitively to values-driven narratives, for most companies in the private sector this requires a little more explanation from leadership.
To foster alignment on values within Product teams, leaders should:
- Clearly communicate what the company values are
- Explain the company mission in terms of the direct impact they have on their users
- Leverage customer and client testimonials to bring these values to light
- Draw a clear line between the day-to-day tasks of each Product Manager and Product Team member and this mission/vision
- Emphasize the innovative and creative nature of the work your Product People are performing and provide opportunities for this to expand
With clear and effective communication from the executive and leadership team, Product Managers on the IC track and above should understand the tangible impact of their work and feel a sense of ownership of the company’s values. This shared sense of mission can help overcome the morale challenges that can arise during a period of economic downturn, and foster alignment between stakeholders.
“People don’t usually go into Product Management because they want to follow orders and constantly seek approval. Rather, they want to be independent thinkers and problem solvers with room to innovate. Even in a space that may not be as technologically “sexy” as self-driving cars or virtual reality, there are still many chances to innovate within an industry, leverage emerging technologies, and shake up the status quo. When a Product Manager doesn’t feel like their current gig is giving them that chance, they’re likely to look elsewhere for a job that will let them scratch that itch.”Rachael Larson, Product School Education Team
Building Out Career Pathways Encourages Long-Term Retention
Product People are attracted to the field because they are curious, driven, and passionate about growth. Yet our research showed that a surprisingly large number of companies, even large and successful ones, do not build out clear career pathways for their Product talent. According to the Future of Product Management report:
- 46% of Product Professionals at companies with 1001+ employees say their companies do not have an official onboarding program that teaches a specific way of doing Product Management at that company.
- The majority of companies (63%) are not currently assessing their Product teams’ level of experience, maturity, and expertise on a regular basis.
Your top Product talent will make the vertical move to positions with more responsibility that support their growth and learning. It’s up to you whether they do this at your company or at your competition. Product Leaders can help foster a retention-positive environment by structuring career advancement tracks for your team.
Another important consideration is the work experience of your team members. If you’re overloaded, it’s hard to take the time out to focus on your own personal career growth. The best Product Leaders carefully manage the capacity of their team members to ensure they are balancing productivity with time out for reflection, experimentation, and training.
Provide the Training Your PMs Need to Advance Along These Pathways
94% of employees would stay at a company longer if it invested in their learning and development. Building out these career pathways within your organization is a huge leap forward. You also need to provide your Product Team members with the training they need to develop the skills to advance along these pathways.
As we alluded to above, this is not a matter of if your Product People will seek out this kind of training. We know they will. It’s a matter of whether they will do this training under the auspices and within the framework of your organization, or whether they will seek opportunities elsewhere.
Here’s what 5,000 Product Managers we Surveyed Want to Learn More About:
- Building a Product Strategy: 60%
- Persuasive Storytelling: 44%
- Cross-Functional Leadership: 36%
- Leading without Authority: 33%
- Stakeholder Management: 29%
Conclusion: Train to Retain
With the cost of replacing a Product Manager pushing a quarter of a million dollars, during times of recession or economic pressure Product Leaders, Learning & Development reps and Human Resources professionals are wise to scout for creative ways to incentivize their Product Talent to stay.
While a market-competitive salary is table-stakes, there are non-financial incentives that can have an outsize impact in helping Product Professionals find more satisfaction in their employment. Product People are values-driven, so communicating company values and making the impact of their work more tangible can significantly increase morale and retention. Product People crave career growth and advancement, so providing clear pathways to advancement within your organization can ensure that your Product talent finds opportunities for growth within your organization as opposed to outside of it.
Training is the glue that holds everything together and makes advancement possible. With strategies that provide Product Managers with what they actually want, a recession does not need to be a barrier to retention.