Attracting and Keeping Talent in Today’s Employee Market
Your employees are likely to leave you. There, we said it. An unpalatable truth, but the unfortunate reality. Regardless of the investment that you make in hiring, inducting, training and developing the employees in your organisation, at some point they will add to your staff attrition statistics.
In September 2020, the U.S. Bureau of Labor Statistics suggested that average employee tenure is 4.2 years. However, with the increasing level of acceptance associated with remote working brought about by the pandemic, hiring companies are now able to cast their recruitment net a lot wider. We anticipate that this will have the effect of reducing employee tenure and increasing employee mobility offering both opportunity and risk for companies attempting to secure and retain the best talent in the market.
A number of our associates are already experiencing an increase in competition for talent, forcing them to engage in an introspective review of compensation and benefit strategies, people development and company culture. Below we lay out how you can attract and keep top talent in today’s employee market.
Compensation and Benefits
Regardless of where you sit on the debate regarding pay and motivation, the fact is companies who offer the most attractive compensation and benefits strategy win in the competition for talent. Consequently, it’s important you maintain a watchful eye on market rates for roles you employ within your company. Understanding those rates (while the Alcon Maddox salary review is published annually in January, we also keep track of local and recent changes) places your company in a position whereby fixed and variable salary can be budgeted and maintained at a competitive level. In our experience this is the very least you should be doing as an organisation.
Companies that attract and retain top talent typically adopt an employee centric approach: reviewing and identifying an employee risk register whereby employees whose departure will have a significant or detrimental impact to the business are subject to an uplift in benefits. Many companies engage in a process of negotiation and counter-offer only after the employee has received a competitive offer from an alternative employer. While such negotiation can secure the employee, the retaining business is placed in a weakened position within the negotiations from the outset, ordinarily resulting in a benefits increase far in excess of what would have, or could have, been agreed if the employee had felt appropriately valued in the first place.
We also see several employers who lose this employee regardless of negotiation and lucrative benefit offers on the basis that the relationship between the parties has been strained as a result of a perceived lack of fairness or action on the original employer to pay the employee what they were worth. Obviously a balance needs to be struck between paying appropriate salary and benefits whilst protecting margins, but the risks associated with not paying employee’s their market value are numerous and far reaching.
When reviewing these factors internally, we suggest not thinking in terms of simple annual basic and variable pay, but a combination of the following;
Annual basic salary
Annual variable salary (bonus, commission, profit share)
Share or share option schemes
Long term incentive plans (variable payments connected to both service length and performance)
Healthcare and dental (family support)
Life assurance (support of surviving dependents in the event of the employee’s death in service)
Ill health insurance (ensures a proportion of the employee’s salary is paid in the event of a protracted term of ill health and inability to work)
Employee assistance programs (legal support, mental health support, etc.)
Relocation benefits (support regarding accommodation, education for dependents, return flights to home country, etc. if employees have relocated for work)
Options associated with equipment that employees are provided for work (surprisingly important to some employees)
Whilst it represents a significant administrative effort, it’s worth operating a flexible benefits package, essentially awarding a gross cash value to an employee then attributing relevant amounts to the various additional benefits. This is an attractive option especially when the workplace contains an array of generations who may value benefits differently.
Development and Culture – Moving Beyond Benefits
It’s almost cliché but you’ll hear it time and again: employee’s don’t leave companies, they leave managers. Although over simplified, there is truth in the fact that if an employee doesn’t engage well with their direct line manager or company leader they are less likely to be fully engaged with their work.
Development dollars are not a cost, they’re an investment. An investment in taking the performance of the individual and the company to new heights.
For this reason, we always encourage our network members to place significant focus on their leadership strategy and their people managers. Alignment with company values, living those values and taking a genuine interest in the people that work within your organisation, will foster a working culture that is difficult to leave.
Companies that design an integrated people development program typically experience a reduced risk of staff attrition in comparison to those that don’t. The very best companies combine their development program with strong people leadership skills ensuring leaders regularly interact with their people, discussing performance and development so that it becomes part of the fabric of their business.
Part of caring about your employees is helping them develop both personally and professionally. Development dollars are not a cost, they’re an investment. An investment in taking the performance of the individual and the company to new heights. An investment in individuals that can engage in internal promotion to be the future leaders of your business. Not only an investment, but a demonstration of the belief that you have in an individual and what they are capable of within your organisation.