Wages in the UK have seen one of the largest falls in the European Union during the economic downturn, according to official figures. Pay freezes and higher taxes have impacted on not just pay packets, but employees are also expected to do more than before. In fact, 2013 was the fifth calendar year in a row when average earnings fell in real terms. John Sylvester talks to www.ingeniousbritain.biz about how to create a loyal workforce under such conditions.
For some organisations, particularly SME’s that have struggled to keep wages in line with inflation, these conditions have had a dramatic impact on staff morale and, as a result, staff turnover has increased. In a vicious circle, these organisations then have to pay to re-hire and re-training new intakes. Combine these factors with a job market that is on the rise and companies will struggle to cling on to staff when the lure of a higher salary pulls them toward a new role.
With one in five intending to leave their job this year and one third actively considering leaving, how can employers make employees think twice about their New Year resolution to find a better paid job?
Pay isn’t the only driver
Creating an engaged workforce is essential in the fight to retain talent in the absence of a pay rise or bonus. Engaged employees aren’t just committed, productive or passionate employees. They believe in the organisation, they believe that they can help the company they work for achieve its goals and by doing so they can also achieve their own personal career goals, therefore making them far less likely to leave for pastures new.
Engaged staff don’t see themselves as working “for” a company, they work “with” a company. It’s a small word change that can make a big difference. Staff who see themselves as working “with” a business see their employer as more than a means to get a pay cheque, they see them as a client who they want to work “with” to create a win-win situation where both the employer and employee profit by working together.
The power of a simple “thank you” and retaining your best talent
Research on motivation in the workplace shows that recognition of achievement matters more to employees than financial rewards. In fact, 83% of employees say recognition for contributions is more fulfilling than any reward and it’s a trend that is increasing.
If companies want to retain employees they need a well structured way to recognise them. 79% of employees who quit their jobs cite lack of appreciation as the main reason, so why does this remain a surprisingly rare agenda item for managers?
1) Reward Loyalty: Switched on businesses have recognised that traditional long service awards for 10, 20, 30 years of service are no longer appropriate in today’s business environment. Encouraging loyalty over shorter periods of time is key. For smaller business this may mean recognising ‘length of service’ with a small gift starting from just one year’s service. The value of the reward is less important than the presentation itself; it is public recognition of loyalty that is needed encourage staff retention.
2) Review Employee Benefits: Benefits that add value to an employment package can make a genuine impact on the way employees view their employer. When low pay increases are commonplace it is essential to offer staff other ways to make genuine savings on their everyday spending and demonstrate that your organisation is helping them to cope with the ever increasing cost of living. Over recent years many benefits solutions that were once only affordable by larger organisations have been made available ‘off-the-shelf’ by providers, giving smaller players the opportunity to benefit from cost efficiencies and greatly reduced set up fees.
3) Manager-Employee Relationships: The Manager-Employee relationship is a key contributor to loyalty and retention. As the saying goes, “people leave managers, not companies.” This comes from the social and emotional forces that effect behaviour. Employees’ motivations change over time as their life changes, which means that the manager-employee relationship also needs to evolve over time. But which ever way you look at it, working relationships matter. To get the best out of the manager-employee relationship it is important to give managers the skills they need to be able to develop working relationships that will motivate their employees. People management doesn’t come naturally to everyone and quite often the manager has been promoted into the role without any formal people management training. Managers should be trained on the softer skills needed to manage people.
4) Continual Feedback: Feedback is fundamental in everyday employer-employee relations. Employees need to be aware of how they are doing and also what they can do to improve, so managers need to provide a continual feedback process which focuses on and employees future performance and career path. The sense of growth and development is a primary driver of employee engagement and managers who are highly effective in coaching and supporting employees outperform their colleagues by a 2 to 1 ratio in productivity, performance and of course, retention.
In addition to implementing these tips, organisations should encourage suggestions and input, showing staff that their opinions count. Many employees have invaluable ideas which could benefit the company, yet often remain unvoiced unless requested. Also, linking employee objectives to the overall company goals ensures that staff can recognise their contributions to the company’s vision. Encouraging development through training shows employees that the business is willing to invest in them, as well as providing the employer with an engaged and skilled workforce. Find out what talents the team has and utilise these when delegating projects to ensure they are using their areas of expertise and developing in relevant areas.
With the job market showing encouraging signs of recovery and increased confidence in the economy many employees will see 2014 as the year to make a move to a new organisation. Companies must review their engagement and motivation strategies in order to retain talent that they cannot afford to lose at this critical point.