Retain and attract employees

Attracting and retaining the best employees.

There is nothing more frustrating for HR professionals and line managers than early attrition after spending considerable time and money bringing someone into an organisation.  The following article discusses a number of strategies that you can use to retain and attract employees.

How much is employee turnover costing you?

Not only is employee turnover inconvenient and time-consuming, but it actually incurs a lot of cost.   These can be found in four main areas[1]:

• Separation costs: for exit interviews, annual leave pay outs, administration costs
• Vacancy costs: increased overtime or temporary cover to fill the vacancy left
• Replacement costs: attracting applicants, potential placement and search fees, interviews, travel/moving expenses, administrative expenses
• Training costs: formal and informal while an employee gets up to speed on their new position.

There are also other implications for your remaining employees such as increased stress and tension, lower morale and decreased productivity.

Know how to sell your ‘product’

Recruiting good employees is the first step in retention, and attracting them to your organisation is just like selling a product.  HR professionals must market their ‘product’ (their organisation), sell its benefits, offer the right price and close the sale.   And all this is done when you don’t even know what the competitor is offering!

When talking to prospective candidates, ask their salary expectation.   If their expectation is reasonable, consider going in with your best offer that is as close to their expectation as possible, rather than offering low and hoping that they will accept it.   While they might initially accept the role at a low offer, if they aren’t happy with the salary, they may keep looking around for something else.

Match your benefits to the needs of employees.

In today’s tight labour market, it’s not unusual for a candidate to have two job offers in front of them offering the same pay in a similar industry.  This is when the additional benefits you offer become the key differentiator between you and your competitors.   Research also shows that there is a clear link between offering employee benefits and increased retention. [2] 

Providing employee benefits doesn’t need to be expensive.  And when you compare it to the cost of attracting and retaining employees, it can be a very cost effective way to differentiate your organisation.

Jane Walker, Director of recruitment company H2R says “Candidates are placing an increased emphasis on additional employee benefits they will receive as part of their overall employment package, over and above the remuneration for a role. As a consequence, organisations that provide meaningful and valued employee benefits are more likely to attract candidates and retain their people”.

However if benefits are to be valued, they need to be relevant. Depending on the age and circumstances of your employees, they will want different benefits.  One way to offer this to create a set of ‘value packages’  which are a set of options that have the same dollar value entitlement, but which will allow employees to tailor their benefits to suit them.  Another option is to place a dollar value on each offering and allow employees to select their own benefits to a certain total value.

For example, you may have groupings of employees that are in the same life stage.  You could consider putting together benefits that are appropriate to these age groups and still allow them the choice of which one to choose.

The following illustration outlines what specific age groups might be interested in.

Gen Y – Aged 8-27 this group is likely to want instant benefits such as gym memberships or ongoing training/education.

Gen X - Aged 28-43, they generally have families and mortgages that they want to protect.  This means benefits such as life insurance, or basic health cover would have a high appeal to them.

 
Baby Boomers - Aged 42-64, this group is likely to be considering their health and may see real value in comprehensive health cover

Whatever your benefits, it’s important to be clear about their value.  For example if you offer them health insurance cover, make sure employees know what that means, such as they receive $200,000[3] worth of surgical procedures and care per policy year.  You could even let them know the cost of their individual premium.

Jane Kennelly, Director, Frog Recruitment says “when benefits are tailored to employee it makes the role that much more appealing – and in turn can also make the employee more ‘sticky’.  The one-size-fits-all approach is fast disappearing as today’s savvy, discerning candidates [spoilt for choice] are making career decisions centred around the total package and what is truly of value to them. Employers who get this mix right are well on the way to aiding their retention. It’s really about mutual benefit!”[e1]

Be a good employer

At the end of the day, employees want to feel good about who they work for and the work they do.   Many employees are now looking for organisations that are ‘green’ or have some sort of triple bottom line reporting.   “More and more, employees are demanding that their employers raise their ‘green standards.’ This is particularly evident in Europe where top graduates are screening potential employers on the basis of their corporate social responsibility policy, particularly in the context of their environmental impact”, says Hamish Reid from the Project Litefoot Trust – an organisation that is seeking to raise sustainability awareness and action (www.projectlitefoot.org).

Did you know...? Four out of ten males and six out of ten females are likely to be off work for 30 – 90 days due to an illness or accident before they turn 65

Healthy workers are happy workers

While some employers will not offer sick days until after six months of employment, consider the negative impact that this can have.  For example  if an employee has the flu but is still required to be at work, they are less productive, will take longer to recover and may also infect others.

Employers need to acknowledge that different people use sick days in different ways.  For example, parents may use sick days to look after their children who are unwell.

Consider offering employees extra sick days  and encouraging them to use them if they are feeling unwell or stressed – in the long run it is employers who will reap the benefits.

Help employees get back to work faster

As an employer, you look after the assets that help you maintain and grow your business.   If there was a problem with a vital piece of machinery or office equipment, chances are that you would experience a loss in productivity or profit, and you would want it fixed as quickly as possible. 

In the same way, it makes sense to protect your investment in your employees by providing them with health insurance cover.  If employees don’t have health insurance, they may have to spend months waiting on the public health system waiting list.  This may mean prolonged periods in pain and discomfort, or even deterioration in their condition. 

Lack of health insurance across your workforce could actually cost you more in lost productivity than the cost of providing health insurance as an employee benefit.

There are a range of policies in the market which you could subsidise or offer to employees and their families at a reduced rate by taking advantage of the size of your organisation.

Author bio

TOWER is in a unique position to be the full solution provider for employee benefits.  We can provide a full range of insurance options including health, life, car, house and contents.  And as one of the Government’s default providers, we can look after and manage your KiwiSaver too.

For more information on how employee benefits can help your organisation, please contact Sarah Bishop on email employee.benefits@tower.co.nz.