Implementing a program that rewards and recognises work and behaviours and supports the mission, goals, values and initiatives of the organisation, is critical for employee retention. Congratulating an employee on a job well done costs very little, but to your people, it's priceless. When people feel that leaders notice and truly value their contributions, their motivation and loyalty grow. Critically, a reward and recognition program motivates employees to change work habits and key behaviours and build a positive and supportive culture. Incentives, both financial and non-financial, can be offered based on performance and applied consistently across the board.
Financial Retention Strategies
- Employee Equity Ownership
Financial studies have shown by far the most effective means of retaining valuable employees is the participation in long-term incentives through equity ownership plans. Equity plans, properly designed, align the internal shareholders with the external shares to attract, motivate and, most importantly, retain valuable employees. They provide an increased sense of ownership and association with the organisation, improve awareness about decisions, directions and corporate plans of the organisation.
- Competitive Remuneration
Remuneration is another critical factor to employees. When you pay people below market value, it suggests that you do not truly value them or their work. If you withhold raises and bonuses during the downturn and have yet to implement any positive changes, you are at real risk of losing staff.
- Employment Agreement
The conditions contained in an employment agreement are critical to retention. It is not uncommon to have a six-month notice period and six-month redundancy payment. By extending the redundancy notice period, particularly for senior employees, you are giving these employees additional time to seek employment elsewhere. Generally, it takes between six and nine months for an employee to secure an equivalent position as senior employee positions are very limited in any industry, particularly in the oil and gas industries. As a result, a six-month redundancy payment would offer some financial stability to the employee, which enables them to focus their energies on the operations of the company rather thanstressing about the volatility that may be present. Not only can a six-month redundancy payment be used to thank departing executives for their long-term and/or outstanding service to the company, it also provides an incentive for employees not to disclose corporate information to competitors or cause adverse publicity when leaving the company.
- Flexible Remuneration Packaging
Offering employees the ability to choose how they receive their remuneration within their total employment cost can increase their feeling of economic security. For example, salary packaging with education and learning benefits, employee discounts, novated and associated car lease, etc.
Non-Financial Retention Strategies
Though often not appreciated, so-called non-financial (even though they still cost money) strategies, can have a stronger impact on employee retention. By far, the strongest is sustainable, clear leadership. My personal experience is that a company with a strong leader (CEO) is inevitably more successful. Part of that success is due to the retention of employees. Non-financial strategies include:
- Freedom and Flexibility
Flexible working arrangements (e.g. flexible working hours, working from home) give employees the ability to balance work and personal demands which can help to reduce absenteeism. Offering your employeesflexible working arrangementsshows that you care about them, which leads to strong loyalty to your organisation.
- Professional and Career Development
Continuous and ongoing professional development helps overcome skills shortage and retain expertise within your organisation. By providing ongoing professional development, you can ensure that your organisation has the skills and capabilities required, and that all employees are making the best possible contribution. Development also allows your organisation to strengthen individual employees’ skills in the direction of existing skills and knowledge gaps.
- Performance Management
A well-implemented performance management system can help to achieve the organisation’s business objectives. By providing employees regular feedback, they know what to aim for,when they are doing well, and what they need to improve on. Studies have shown that effective performance management systems can lead to happier, more motivated and better performing employees.
- Employee Engagement
Employees who are engaged are more productive and content, and more likely to be loyal to your organisation. By measuring employee engagement, you will have an accurate assessment of an employee's commitment and contribution to the success of your organisation.
- Clear Career Path
Employees want to know they have a future at your company.
- Clear Communication
Last but not least, unambiguous communication is the foundation for all your other retention efforts. Keeping employees in the loop helps them feel they are a key part of your organisation and that they have a role to play in upcoming plans.
