It’s Time to Talk About Pay (Again)
There are certainly unique compensation challenges that occur in this tight labor market when hiring new employees. But there are also challenges when it comes to retaining your best employees. These are the employees your competitors may be trying to lure away because they’ve lost people to their competitors. Or maybe your employees are just looking around for a higher salary and more opportunities. Or perhaps they’re unhappy where they are.
A 2018 Conference Board survey reported that only 43% of employees are happy in their current positions. That number is up slightly from previous years, but still not all that great.
So, how do you keep your best people without breaking the bank? This, too, is a complex issue without a simple solution. There are some steps, however, that you can take to increase retention. The good news is they don’t all involve big salary increases.
1. Invest Time and Money in Your Managers and Supervisors
According to a recent Fortune survey, the No. 1 reason people leave their jobs is due to bad supervisors and managers. “Bad” supervision and management comes in all shapes and sizes. Employees may feel their work is not recognized or appreciated, may not be given clear direction, and often receive no feedback on their performance until appraisal time, when a host of issues that might have easily been addressed sooner suddenly appear.
To be fair, employees who are promoted into supervisory and management positions often lack the skills to succeed and aren’t given a lot of guidance and support by their own supervisors and managers. If they’re not successful and leave the organization, that means another new, inexperienced supervisor may assume the role. Unfortunately, it’s not unusual to hear employees say, “I’ve had six different supervisors in the last 18 months and have no idea what I’m supposed to be doing.” Investing in your managers and supervisors can help your organization avoid this chronic problem.
2. Be Proactive
Often, employees don’t get asked about staying with an organization until they announce they’re leaving. Being pre-emptive and proactive — through regular, formal and informal employee communication — can help identify employees who may be thinking of leaving. In 2014, recruiters at Credit Suisse started calling employees that were identified as being at risk of leaving and notifying them of openings within the company. The company estimated they successfully retained 300 employees and saved $75-100 million in recruiting and training costs as a result.
3. Start Thinking and Communicating About Total Compensation
Most organizations don’t do a good enough job of thinking about and communicating total compensation. A typical benefit package is “worth” 30-35% of an employee’s base salary, and a robust package may be worth almost 50%. Add in incentive and profit-sharing plans and your total compensation package may actually exceed that of your competitors. Make sure your employees understand that. Just like it’s possible to create a customized benefit package for a potential new hire, offerings like an extra week of paid vacation or an increased contribution to health insurance can be useful tools for retaining an employee that you don’t want to lose.
4. Restructure Jobs
If you’re balking at giving each of your customer service representatives (CSRs) a $10,000 raise to match the salary of a newly hired CSR, consider restructuring or adding more responsibility to their jobs. Do they handle more complex calls? Do they work more closely with sales representatives? They may already be functioning as senior CSRs. However you choose to address this type of issue, be sure that you are rewarding something tangible and meaningful. Be transparent if you go this route. Remember, your employees will talk about it.
5. Offer a Variety of Training and Development Opportunities
According to the same Fortune survey cited above, the third most frequent reason for employees to leave their jobs is lack of opportunity. There are many ways to provide your employees with training and education to prepare them for new opportunities. These may include formal courses, industry conferences or inexpensive alternatives, such as providing a mentor or cross-training opportunity.
An increasing number of employers are also offering tuition reimbursement for education not related to an individual’s current position. Many traditional tuition reimbursement plans limited reimbursement to coursework related to a current position, but a 2015 International Foundation of Employee Benefit Plans survey reported 46% of respondents offered tuition reimbursement for any coursework, whether or not related to work currently performed.
Bottom line: Get creative and ahead of the game to keep your best employees. If you need any help with your compensation needs, give us at Affinity HR Group a call.
Susan Palé is a contributor for Affinity HR Group Inc. Affinity HR Group specializes in providing human resources assistance to associations such as RIA and their member companies. To learn more, visit www.affinityHRgroup.com.