The Top Ten Things You Need to Do Now to Remain Competitive
“To stem the tide, senior executives must understand why employees are leaving. Many are struggling to do so. For example, when employers were asked why their people had quit, they cited compensation, work-life balance, and poor physical and emotional health. These issues did matter to employees—just not as much as employers thought they did. By contrast, the top three factors employees cited as reasons for quitting were that they didn’t feel valued by their managers (54 per cent) or their organisations (52 per cent) or because they didn’t feel a sense of belonging at work (51 per cent).” McKinsey Quarterly, September 2021, ‘Great Attrition’ or ‘Great Attraction’? The choice is yours
The Great Resignation is impacting organisations across the globe, and as an employer, there are certain things that you need to be doing to remain competitive in the current marketplace. The Innecto team have pulled together their top ten sustainable suggestions that won’t break your internal systems and will support equality and fairness.
1. Share the Positives to Attract Talent
It is not always just the headline pay that attracts potential employees – if feeling undervalued or a missing sense of belonging are the reasons why people quit, the opposite would be why they would join your company. Feeling valued and having a sense of belonging is hugely important – so how can you share the positive things that you do to attract people? Whilst pay is important, it is also important to understand that some employees can be already well paid but be the most disengaged. The one thing we’ve learned in the last 18 months is that it’s not the same for everyone! Experiences weren’t the same during the COVID-19 pandemic, and what employees are looking for now from their employers, simply won’t be the same. Employees at every level of income are looking for new jobs -- but pay strategies can reinforce engagement or can completely erode it. To reinforce that, Gallup states that it takes more than a 20 per cent pay raise to lure most employees away from a manager who engages them, and next to nothing to poach the most disengaged workers. They also go on to say that managers are the key.
2. Use Premium Allowances
Recruiting to fill vacancies that breaks pay band structures will potentially create pay inequity that can’t be easily removed. Employers should consider alternatives where possible, such as using premium allowances. Sometimes known as a 'Golden Hello', a premium allowance is a lump sum that aids in the initial attraction of staff to a particular role. This can be made as either a one-off payment, in several stages, or on an ongoing basis to include an element of staff retention. Premium allowances enable employers to recognise a market premium now but can be flexibly managed if demand, pay levels, or both, drop, meaning no commitment to facilitate this on an ongoing basis, protecting your pay band structures.
3. Highlight the Career Development Opportunities
These don’t have to be expensive training schemes, for example. Ask yourself, what’s the USP (unique selling point) that people can benefit from by joining your organisation. For example, are you smaller than your competitors? That could mean more autonomy and opportunities to get involved in a diverse range of projects. Are you global? This can be attractive to people who are looking to grow their careers internationally. What do you offer that others don’t? Perhaps you have specific coaching and mentoring opportunities? All of these are relevant and important career development opportunities that should be showcased when attracting new talent to your organisation.
4. Check Your Online Reviews
Online reviews are often the first port of call when looking to purchase a new household appliance or book a holiday, and now this is also the case when people are looking for a new role. According to Randstad USA, 57 per cent of job candidates wouldn’t even apply for a role at a company with negative online reviews. What do your Glassdoor reviews say? What’s the reputation of how you treat your staff? Companies who treat staff well don’t have to sell themselves – their reputation precedes them! Now is a great time to check what your employees – and former employees – are saying about you online and look to identify ways you can improve any negative feedback.
5. Operating Staff Recommendation and Referral Schemes
Ask yourself, what does it cost to recruit through employment agencies versus offering staff financial incentives to refer hires? With recruitment agencies charging between 20-30 per cent of your new hire’s salary, you could be not only saving money with a successful referral scheme but also improving diversity.
These referral schemes don’t even need to have monetary values attached to them – Salesforce‘s popular Recruitment Happy Hours are get-togethers hosted by the company for staff to invite potential new hires to meet the team and have an informal meet and greet.
Referral schemes can also be a good way to improve diversity and reach people you might otherwise not have targeted. Intel has effectively done this with their scheme, by doubling the referral bonus when employees successfully refer women and minorities.
6. Retention Bonuses
You don’t have to pay significant sums upfront but if people prove themselves, why not give them the opportunity and provide a carrot as a future incentive? Yes, it needs to be meaningful and effectively assessed, rather like an LTIP concept. A retention bonus is a lump sum – usually between 10-25 per cent of an employee’s base salary – which a company pays to an employee to stay with the company for an agreed amount of time.
Retention bonuses are most common in large companies and are usually offered to top-level or key employees. Not only can such bonuses sustain and increase morale and productivity during stressful times (such as mergers, acquisitions, or large projects), they can also provide a good incentive for valuable employees to stay with you when competitors may be looking to poach them. Again, these incentives don’t always have to have a monetary value assigned – some organisations offer things such as additional paid leave instead.
7. The Employee Lifetime Value
We often talk about people getting off the blocks quickly! So, make sure you are getting the best value from your recruitment spend by investing in onboarding, but do also consider the whole employee lifetime value and how you can improve your ROI – we are covering this in more detail in our upcoming Pay Trends virtual event in February, you can register here.
8. Benchmark Within Your Sector
Use your local networks to share information. Some sectors such as retail or banking are very open about their reward challenges, whilst others are more secretive. You don’t have to share people’s exact salaries, but you can learn from each other and collate insights that can support your approach with your senior executives and managers. One thing you could do is create networking groups. Recognise recruiters will always suggest a more buoyant market and/or higher salaries, and remember, it’s in their interest to do so!
Communicating your pay strategy effectively is also important. A survey by PayScale found that most people don’t know if they’re paid fairly or not, with 80 per cent of people who are paid above market thinking they’re at or below market, and 64 per cent of people paid at market believing they’re paid below market. Paying your people well isn’t enough – it needs to be communicated effectively for the value to be appreciated.
9. Flexible Working
Not all roles or organisations can facilitate flexible or remote working, but if you can, do offer this perk. CIPD’s Good Work Index Survey found that among employees who have no access to flexible working, about 80 per cent would like it, and more than half the workforce would like to work flexibly in at least one form that is not currently available to them.
The benefits to employers of flexible working are wide – alongside the cost savings or reducing the requirements for office space, organisations can also see improved employee job satisfaction and wellbeing. Cranfield University Research found that flexible workers have a higher level of job satisfaction, commitment and are more likely to increase discretionary effort compared to those who do not work flexibly, and CIPD also found that flexible working can reduce absence rates, and support mental health.
Further to this, the flexibility that a post-pandemic world could offer in terms of roles could end up reducing the Gender Pay Gap. If employers realise they need to position their offering in a much more flexible way, then this could open jobs up to women where they otherwise might not have applied thus increasing their earning power and position in the upper quartile. On top of this, those that embrace and implement family-friendly policies could also be the ones to win the war on talent rather than those with the fat base salaries, and in doing so this also helps to move the dial on societal norms around career progression.
10. Train Your “Average” Managers
Spending money on training your “average” managers to be better and getting rid of the poor-performing ones should be a big focus for any organisation. Of course, many managers who find themselves in the position of managing others, reached that position by progression (so moving up in their career to a managerial role). However, how many people join an organisation as a manager? Mentoring and training are very important – especially when navigating a post-COVID world, which will be something they won’t have encountered before!
All of the above are sustainable, easy-to-implement practices to help retain your top talent and also to incentivise potential new talent to apply to your organisation. They are also essential to remain competitive in an often-crowded marketplace, where attracting and retaining quality people is paramount to your success, both as a business and as an employer.
We will be covering much of the topics discussed here at our upcoming virtual Pay Trends event. For Reward professionals interested in 2022’s top trends, this event offers a great return on your time investment, and is Certified Professional Development accredited. The session is complimentary with limited spaces – if you’ve attended before, you’ll know they get filled quickly, so be sure to register for your free ticket ASAP here.