UK: It’s All About Your People - Retention And Reward Strategies

Last Updated: 26 June 2014
Article by Jane Baalam and Ali Bevan

What would you do if your star performer announced that they were leaving and taking their team with them? Jane Baalam and Ali Bevan-Howlett look at how to avoid this unwelcome scenario.

The success and growth of your business depends on your employees contributing effectively to your business objectives and priorities. If your star performer suddenly resigns, they're likely to disengage and won't necessarily add as much value. There is also a risk that when they leave they may take other key talent with them. With this in mind, it's worth considering whether your reward and retention strategies are robust enough to survive these challenges.

Ways to improve retention

Not everyone is motivated by money. So, consider how to retain key talent who are driven by development and future career opportunities. Make sure your senior management team has visibility of employees with high potential – particularly those individuals who gain more job satisfaction from a clear career path. Map your succession planning with timeframes and communicate this to your employees.

Other examples of retention initiatives include:

  • establishing a mentoring programme – which all employees can access
  • offering personal development sessions – ideally, at least twice a year with additional training opportunities, such as secondments and project work
  • job rotation – which is relatively inexpensive to the bottomline
  • flexible working opportunities – to show your employees that you understand the importance of a work-life balance.

Money's too tight to mention

Here are some retention initiatives that you may be able to consider if money is an issue.

1. Communicate and be clear on your current reward offering

  • Explain to employees how much their benefits are worth.
  • The 'total reward' package includes salary, bonuses, share awards, benefits, pension, life cover, training, career development, company culture and work environment.
  • Work hard to communicate the total value of your reward package to your employees in clear and fresh ways. For example, provide all employees with an annual individual reward statement detailing a breakdown of their benefits and costs, promote all benefits via annual roadshows and use desk drops to promote new ones.

2. Identify the strengths and weaknesses of what you offer

  • Perform a critical analysis of each element of the total reward package.
  • Identify what works well and the 'sacred cows'.
  • Establish where reward supports or works against your business goals, for example, does the bonus award recognise team efforts or just individual achievements?

3. Understand the marketplace

  • Compare your existing reward package with those offered by your competitors – information is available from benchmarking data, new recruits and leavers.
  • Understand the current trends and offerings – find out what the market leaders are introducing.
  • Research articles and reports from other organisations. For example, Incomes Data Services (IDS) report, Personnel Today and People Management.

Speak to your employees and get their views.

4. Update your total reward offering

  • Consider how reward can support your business goals.
  • Are there areas supporting the reward strategy which require review, for example, performance management systems?

5. Collaborate, implement and communicate

  • Collaborate with other departments for consistency, for example, finance, marketing and HR.
  • Develop a model to allow you to test options and costings.
  • Finalise the design and agree an implementation plan.
  • Prepare support tools and communications.
  • Make presentations to employees.

6. Review regularly

  • Build in an early review point.
  • Check that the new system is achieving the right results.
  • Modify as needed to reflect the market and the outcomes in your business.
  • Take time to check whether the benefits offered meet employee needs.

Finally, always be open and transparent with your employees, involving them in key business decisions and development opportunities. This will increase their loyalty and commitment, improve your overall business performance and reduce staff turnover.

We have taken great care to ensure the accuracy of this newsletter. However, the newsletter is written in general terms and you are strongly recommended to seek specific advice before taking any action based on the information it contains. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. © Smith & Williamson Holdings Limited 2014. code 14/414 exp: 31/10/14

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