Recruiting and retaining the staff who can deliver the strategic objectives of an organisation are fundamental responsibilities of any manager. Whilst selecting individuals who match the ethos and culture is crucial, they will not join the organisation if the pay and benefits package is not attractive. Joanne attends a conference with guest speaker Evan Johnson, managing director of the Rewards Group, and summarises Evan’s simple steps for managing the reward package for employees at all levels.
• Assessing your assets
• Start at the beginning
• How do you reward staff?
• The feedback loop
• Groundwork for success
Assessing your assets
All too often, the power of the individual within a company is neglected or underrated. The fact is, without a team of talented individuals that are fighting with you and for you, where are you going to be in five years time? You may have given them training, support, advice and guidance, but what about the package – the pay and benefits? If you rely on your team’s knowledge and talents for success, have you assessed the impact your reward system might have on them? After all, you don’t want your Einsteins running off to your competitors!
It doesn’t take a genius to determine the fundamentals for retaining key staff, just common sense. A good remuneration package, benefits and staff perks. However, the difficulty arises in knowing how to effectively implement and assess it. Setting salary benefits packages to attract and retain quality staff is all about managing reward, and managing reward is doing the things you need to do to implement the reward strategy. As Evan says: ‘The reward strategy is the means of using pay and/or other forms of reward, to assist the organisation to achieve its corporate goals.’ So, where does the difficulty lie?
‘Essentially,’ says Evan, ‘the concept is easy. For example, your company or department decides to pay the upper quartile in your chosen market. It is the management of this strategy that becomes complex – which employee groups? What is the market? How do you collect and compare data? What is the effect on others?’ Evan emphasises the importance of taking simple, procedural steps and implementing key changes to help keep your staff and encourage them to perform at their optimum.
Start at the beginning
Sue Browell, author of ‘Successful Staff Retention’, part of the Institute of Management’s Successful Business in a Week series, believes that stopping employees from leaving begins before they are recruited and continues even after they have left. She says: ‘It costs money to keep staff, but then recruitment can cost up to 150 per cent of the advertised post’s salary and failing to deal with staff retention can potentially affect financial performance. It is not a simple issue, but if you want to keep your best staff then you need to take action.’
Evan suggests four steps to retaining key staff:
Recruit the right people
It is of prime importance to set clear objectives and determine the job specification. ‘Define the job, specify the competencies, set the reward package, attract the candidate, assess the candidate and set the pay.’
Continually invest in them
To get the best out of your staff, training, development and coaching should be an intrinsic part of the package. ‘Investments should deliver returns,’ says Evan. ‘For every hundred dollars you invest, you should get one thousand dollars return – so get it right!’
Create an environment for those who want to succeed. As the old adage goes, ‘Success breeds success.’ Therefore, as Evan says, ‘Many of these objectives lie in the hands of management. If you know where you’re going, there’s a chance you will arrive; it’s the knowledge of the unknown that causes dissatisfaction – moving goalposts, no feedback, and no pats on the back! Sometimes actions speak louder than money.’
Set the standards
If you don’t tell people what you want from them up-front, how can you expect them to conform? Generally, people want to succeed and do well. Set the standard by informing them of how you expect them to behave, dress and conduct themselves within the office. Moreover, let them know when they succeed, and when they fail.
How do you reward staff?
Typical staff rewards cover pay, benefits, training and the working environment. Getting the basic pay structure in place is of up-most importance. First of all, which type of job evaluation are you going to use to structure your pay package? Analytical – where you create the job first and then put the people in place? Non-analytical – where the whole job evaluation is based on a ranking scheme? Or using pay comparisons?
According to Evan, ‘The salary structure should depend on the size, type and nature of the organisation, and should provide the flexibility to cope with market and skills pressures. It should also have the scope to reward high achievers and solid performers, and form the basis for career planning.’
In order to maintain a happy working environment, it is important for employers to identify what’s important to the people that make up its workforce; for example, parents, graduates, older workers, women and specialist staff. The pay ranges can then be set in relation to age, service, qualifications, performance and marketability.
The advantages of pay ranges are they enable you to distinguish between good, average and poor performers. Evan says: ‘This system rewards stars and solid performers, recognises exceptional performances and provides for ‘special’ employees. Overall, you should aim at combining a basic package – reflecting knowledge, skills, responsibility and seniority – with a bonus or commission scheme that rewards individual goals, team goals and corporate goals.’
The feedback loop
Research shows that paying exorbitant rates to attract and retain talent is not necessarily the answer. For example, a survey published by the Institute of Management about managers’ changing professional and personal roles, entitled, ‘A Question of Balance?’ suggests that less than a third of managers say that salary was the main reason for changing employers. So, what else?
‘The reward package is only one factor,’ says Evan. ‘Other motivating factors which attract and retain staff are: interest in the job, prospects in the organisation and working conditions. Is it a ‘nice’ place to work? What do your employees like about it? What’s lacking? If you don’t know, why not ask your staff. Send a survey around the office; ask for feedback in appraisals, reviews, or in exit interviews. Make your staff feel valued – show them that their input counts now – rather than leaving it too late!’
Groundwork for success
Don’t wait for the inevitable to come along – losing staff could have repercussions on your business, and your clients could begin to doubt your ability. Although some staff will eventually move on, it is important to identify the needs of the individual – what benefits are attractive and how will these produce results for you? A strategic reward system – pay, benefits, continual training and investment – can provide an excellent grounding for a successful, adept team. As Evan says, ‘Spend the money, invest in your staff. If you get your strategy correct, you’ll be rewarded with more than ten times the amount of money invested.’