After the experiences of the past two years, the number of employees forecast to move jobs or do something completely different is expected to soar. The ‘Great Resignation’ as it’s being called means companies of all shapes and sizes need to think about how they can hold onto their staff and what they can do to attract new employees.
Many people have had a really tough couple of years, with some employees having had to go on furlough for months on end and many now acutely aware of the financial constraints the pandemic has placed on their employer. A recent survey found that 20% of SMEs will be unable to offer a pay rise this year, meaning many staff will re-evaluate their position. With increases in national insurance contributions too, many employers will be feeling the strain. But with inflation expected to hit 7.25% in April and fuel prices (both heating and vehicle) going through the roof, employees may be forced to ‘vote with their feet’.
So if pay is less viable as part of a company’s recruitment or employee retention strategy, what else can be done to stay ahead of the competition and remain an attractive choice for staff.
Here are some top factors to consider:
Think carefully about your hybrid working strategy, and how it can pay dividends to employee morale. It’s not viable for everyone and more complex than a simple ‘home or office’ choice, but a well designed approach can not only help to reduce an employer’s overhead costs, but also help staff reduce their costs of commuting to and from work and also, in some cases, the cost of childcare (e.g. before and after school clubs)
Giving staff freedom to organise their work around them is worth as much, if not more, than a pay rise to many. It might mean needing three staff on flexible hours rather than two full-timers, but there’s generally no more cost and just a little bit more organisation required. Giving staff the working flexibility to fit in what else is important to them outside of work will be a great retention technique in particular. And don’t forget the four-day working week is already being piloted as part of a global initiative, so the principle of work-life balance is likely to stay high on may organisation’s agenda.
So, a pay increase (with increased tax, National Insurance and pension contributions) may not be on the table, but what about a performance-related pay approach? The costs would need to be met by increased profits, but if performance is delivered this is a real win, win.
Focus on Wellbeing:
For many years we’ve talked about the three elements of employee wellbeing (financial wellbeing, mental wellbeing and physical wellbeing) and how this isn’t just a ‘nice thing to do’ – focusing on employee wellbeing naturally increases engagement, with the combined effect being improved performance. The pandemic has had a major effect on many people’s wellbeing, whether financial worries and debt, mental wellbeing through lockdown and periods of isolation through to the positive impact on physical health through having more time to exercise. Think about offering debt consolidation services (with renegotiated repayments paid out directly through payroll), or arrange expert financial planning sessions for staff to help them with budgeting and financial planning. The Money Helper (formerly the Money Advice Service) is a great source of support and some IFAs will offer free one-to-one reviews.
There are endless options in relation to employee benefits that can be offered that will help staff save money and improve their mental and physical health –private medical insurance or a health cash plan remain ever popular and of even greater value post-COVID, a benefits platform, such as Benefits Cloud, that offers discounts, deals and special money saving offers on a wide range of retail and services is a low cost / high impact option or gym discounts, wellbeing platforms, cinema clubs and eating out discounts are other considerations. Salary sacrifice schemes are another great way that not only help to save money, but also enjoy great benefits. Salary sacrifice schemes do come with some complexity, so it is essential they are properly set-up and implemented, but can be applied to benefits as diverse as cycle to work schemes, pension schemes, holidays and electric vehicles.
Training and Development
Training and development can have great retention powers, as it demonstrates a long-term vision for and a commitment to the employee.
Whilst all of this might sound like it’s just adding more overhead cost to the business, compare this to the cost associated with recruiting, inducting and training a new member of staff; £12,000 according to Accounts and Legal.