A high staff turnover can cost businesses dearly, especially in time and productivity. Try these tips on how to retain your employees in a tight labour market.
By the myBusiness techblog team
Here’s a stark truth for businesses to reflect on. In a survey conducted by human resource firm Ranstad last December, one in two Singaporeans – as much as half the local workforce – said they aim to leave their jobs within the next two years. Dissatisfaction with pay was cited as a key reason spurring employees to consider leaving their jobs for greener pastures.
For companies with a small workforce, losing critical staff often translates to organisational issues that could range from lost knowledge to training time needed, to low morale and costly recruitment searches amidst a shortage of skilled workers.
For SMEs and start-ups with little cash to spare for hefty financial incentive schemes and big bonus payouts to keep poachers away, how can they retain their staff in a tight labour market, and without breaking the bank?
Implementing a comprehensive rewards system
A comprehensive rewards programme, which includes both cash and non-cash components, offers companies the flexibility to align corporate goals and objectives with ensuring the rewards attract and secure the kind of employees required for their organisation’s needs. This system could include a base pay with bonuses, variable pay and commissions, together with non-cash benefits.
For instance, some companies have a points system to reward employees who put in over and above what is required of them, be this overtime or employee suggestions that lead to implementation. Employees can cash in their points to pick up vouchers, company products at special discounts, travel packages, even car hires.
One such company, Tata Consultancy Services, an India-based IT services, business solutions and outsourcing firm, gives special parking spaces, gift cards and days off, among other non-cash benefits, as part of its total rewards scheme.
Keeping benefits progressive and flexible
Moving one step further, a strong employee benefits package can be a powerful tool for attracting and retaining high performers. Perhaps the best example of that comes from Google. Then CEO Eric Schmidt cited of the Google culture: “The goal is to strip away everything that gets in our employees’ way. We provide a standard package of fringe benefits, but on top of that are first-class dining facilities, gyms, laundry rooms, massage rooms, haircuts, carwashes, dry cleaning, commuting buses – just about anything a hardworking employee might want.”
That said, a tailored benefits programme – one that actually benefits the staff – is something often overlooked by companies in countries like Singapore, says insurance company Lockton’s Head of Sales for Singapore and Asia, Peter Jackson. Most companies, he notes in his blog, offer traditional benefits such as medical and life insurance without finding out if they are actually benefits their people want.
Jackson suggests that companies should allow employees to trade benefits they do not want, for those that they do. For instance, younger staff may not want as much company pension contribution as others, and may prefer to exchange this for a few days of extra holiday allowance instead. He reasons that such a solution can only be a win-win proposition as businesses, especially SMEs with small budgets, don’t need to spend any more money than they already do.
Global consulting firm Hay Group, which studied the changing face of rewards, noted that staff benefit requirements are changing. Inexpensive retention tactics now include more progressive benefits such as career planning, childcare facilities, eldercare services, lifestyle coaching, and even house cleaning, gardening services and dog walking.
Keeping it real and affordable
While some benefits may be out of reach for small businesses, a little out-of-box creativity can lead to similar, less expensive options that could have just as big an impact on staff morale and loyalty.
For instance, if businesses can’t afford onsite childcare benefits, they could try outsourcing this by negotiating with a neighbourhood childcare centre for a group discount. Similarly, if companies can’t offer transport allowances or free parking to their top employees, they could consider allowing telecommuting on days when there are no major meetings.
If training, which is a crucial part of career development for staff, is out of reach of a company’s budget, an arrangement with its staff could be to have them work on special projects or serve on boards for the opportunity of on-the-job experience and exposure that will benefit their resume.
It is also worth remembering that the simple act of recognising and praising staff for the extra effort put in or a job well done costs nothing but often has the same impact on job satisfaction as a modest pay rise, as observed by UK consulting firm White Water Strategies in an earlier study.
Take the example of Salesforce.com. The US-based cloud computing company counteracts the effects of low pay and disengagement with an open-door policy in which call centre employees spend 15 minutes each fortnight with a manager. Employees’ achievements are celebrated with certificates and acclaim.
So does your company already implement any of the above employee benefits? Share your thoughts on ways businesses can effectively attract and retain their key workers without spending a fortune.