Employee Retention - it’s not just about a pay rise
Retaining your staff through an economic downturn is about more than just financial reward. Martin Nicholson encourages you to consider your options to mitigate the risk of staff leaving you in 2024
With so much change since 2020 it’s understandable that all metrics are a little confused at present. We are, according to reports, in the midst of a recession. Yet according to latest unemployment figures (a new format so some trepidation at comparing here) our unemployment rate to the end of 2023 has not reduced from the same quarter in 2022 (3.8% of labour market).
What is clear is that skilled labour has never been in greater demand. The inflationary pressure on cost of living, and the knock-on effect on wage levels, has led to people looking into the market – not because they necessarily want to leave, but because they cannot afford to stay. A £5k salary rise for a sideways move would make a difference to most people in most professions right now, so the temptation to jump employer for a short term uplift has never been higher.
Retention:
the act of retaining something. synonyms: holding, keeping.
types: withholding. the act of holding back or keeping within your possession or control.
Of course for employers, simply paying another £5k to all (though I am sure tempting) is simply not affordable and it actually doesn’t guarantee that an alternative role still won’t tempt someone. There may still be another £3k they could achieve even with the increase you provide. In other words retention cannot purely be about financial factors.
So what are the 5 themes we are encouraging to mitigate the risk of staff leaving you in 2024?
1. Focus on the mid term career goals
Sounds obvious, but it’s often ignored. Your time, though precious, is free right? Spend time with your team. Spend time ensuring that all managers seek to understand their staff and where they want to develop their careers. Ensure you have a development objective for everyone: improve the use of a piece of software; gain a new formal qualification; go on secondment into a brand new department or location. It’s better than losing them to the competition. Seek to ensure you create an open feedback culture where team development is always spoken about and is never seen as a threat. If your team see genuine mid-term gain in regards to their knowledge – and therefore marketability and career – they are much less likely to move for money alone.
2. Stretch in the current role
Be sure to also discuss and agree the activity they can deliver (with support) in 2024, that isn’t in their comfort zone. MOST people don’t want to stay still. A suitable achievable stretch, and thereby gaining knowledge, may keep them interested – even if not for financial gain in the short term.
3. Benefits
There are so many great opportunities out there to provide benefits at little cost but of maximum value. Here are some ideas. Speak to the team work out what interests people and choose one or two now and a third later in the year:
Cycle to work.* No significant cost, potentially large long-term commitment.
Pension contributions.*
Holiday buy and sell. Reward those who want to use less, encourage others to take a little more. (Minimum 20 days + bank holidays cannot be sold.)
Retail discount schemes. Typically 3-5% discount on main grocery shopping.
Cash plan medical schemes. Small Benefit in Kind** but large potential cash return for staff when they need it.
A return to an office lunch or early evening meal out as a business. Doesn’t need to be fuelled by alcohol, but reminds people of working with great people, and helps make it harder to leave right? (Make sure you only employ great people!)
This list is an example only…
* can be salary sacrificed and therefore tax efficient
** when paid by employer
4. Critical Roles
Too much is made of high-potential staff and potential successors. If you are on a limited budget for 2024 focus on the critical roles you have in the Organisation. These are the activities that you have to have done, that would impact the business rapidly if they weren’t done and that cannot be covered by others. If the individual in that role left, could you replace them? If the answer is “no” – or even “err, I am not sure” – then work on a specific plan to keep those people/that person. That plan should include:
A specific set of retention approaches including financial bonus/commission;
Review of market salary;
A plan to de-risk that critical role NOW!
How do you start to show the activity they do, ensuring that others learn parts of the role?
Is the role detail kept in their head? Fix it FAST.
5. Reward
No, I am not talking about financial reward. This is simply the act of thanking people for their efforts, for the good work they do/have done and for recognising when something was tough but was delivered anyway. It shouldn’t be hard to do, but it takes a concerted effort to remember to do it and to start to do it more. If you are recognising both one-to-one, and in groups, it’s amazing how quickly that culture spreads. Once you have that magic ingredient, why would anyone want to leave?
If anything in this article has resonated with you and you would like to discuss further then please get in touch.
ProAction HR helps Organisations thrive through the quality and uniqueness of their people. That Includes helping you keep them!
