This article has been supplied by Unum.
If you read nothing else, read this…
- Employers need to build staff engagement to help fight the war for talent.
- Organisations need to consider benefits that help differentiate them from competitors.
- Wellbeing plans need to be aligned to employers’ workforce demographics.
As the economy strengthens and the job market improves, the power has shifted from employer to employee.
Since the beginning of the recession in 2008/9, employees have been focused on just having a job and felt too vulnerable to consider moving. Now, as confidence in the economy grows and new job opportunities are being created, employees are beginning to look around and consider their options.
The battle to find and retain the best talent has become fiercer. Now, employees feel they have more choices and are looking for more than just a fair salary.
In a survey conducted by Research Now, commissioned by Unum in 2013, we asked employers what their most important asset is. Regardless of organisation size or industry sector, more than 90% of respondents said their employees were their most important asset. Yet far more had insurance in place to cover easily replaceable items such as mobile phones and printers than to cover their staff in the event of long-term illness or injury.
Employers may not, it seems, be spending their budgets wisely on protecting the assets that will actually make their business thrive and grow.
This does not make sense, as most employers want to retain employees once they have the right ones in place. Losing staff is expensive. Many businesses may monitor the logistical cost of recruiting a new employee and will know how much they spend on advertising the position and agency fees, but the financial implications of staff turnover go much deeper than this.
There is also the cost of getting new employees up to speed and performing at their full potential. Oxford Economics’ research The cost of brain drain, commissioned by Unum in April 2014, found that the average cost of replacing a single employee earning more than £25,000 is £30,614. This figure comprises £5,433 for logistical costs and £25,181 for getting that employee working at their full potential.
This highlights just how important it is for an employer to keep its best employees and that staff retention should be a focus for all senior managers, not just the HR department.
Employers need to build engagement
A recent study by The Economist Intelligence Unit, and sponsored by Towers Watson, Is 75 the new 65?, published in February 2014, shows that higher pay does not buy employee loyalty or engagement. If an employer’s retention strategy is based solely on buying its workforce, then it is comparatively easy for staff to be tempted away by the lure of a higher salary elsewhere. So, what else do employers need to build engagement?
What really creates loyalty is a caring and supportive environment where employees feel listened to and valued. This makes a real difference because, in a survey conducted by ICM for Unum earlier this year, we found one-third of employees would consider leaving their job because of poor workplace wellbeing.
Of course, a fair and competitive salary is important, but almost as high a priority for staff is having a good relationship with their line manager and feeling empowered. About two-thirds also cited a comprehensive benefits package and financial support if they fall ill, as a priority.
The research showed that traditional benefits such as a bonus and a pension rank much lower in the list of priorities, which is perhaps unsurprising with the roll-out of pensions auto-enrolment over the next few years, because every organisation will have a pension plan by 2018. This means that employers will need to look at other benefits they can offer to differentiate themselves from competitors.
The workforce has changed significantly over the past few decades and now features more women and older workers, as well as those with a disability or long-term illness, with all employees looking for more from their employers to support their current needs and work-life balance.
According to the ICM survey, women were significantly less satisfied with how their employers look after their wellbeing (42%) than men (30%). This could be for many reasons, such as higher expectations and the need for greater support and flexibility due to commitments outside work, such as childcare, and financial protection tends to be higher on their list of priorities.
This is why employers need to look at the make-up of their workforce and match their wellbeing plan accordingly, depending on the age and gender of their staff.
Attracting and keeping the best talent should be a priority for every business and creating the right culture is an essential part of this. Many things feed into this, such as good leadership, a holistic approach to wellbeing and a comprehensive benefits package.
Once these building blocks are in place, communication is key. If staff are not aware of the workplace benefits on offer, they will not fully appreciate them. This means employers will fail to reap the benefits of increased staff loyalty. Instead, their investment in wellbeing, which should increase engagement, will go to waste.
Andrew Potterton is head of proposition development at Unum