Retention: the power of package in retaining top people
We work for money. Employers think that’s why we’re there. Salaries have escalated to levels undreamed of a few years ago. The more we earn, the more we are convinced that the following year there should be a little more. It’s like the carrot that keeps bumping our nose but we can’t quite get the bite we want. So, in essence, we should be happy just to go to work, that carrot driving us ever forward.
Yes…well, turns out it’s not quite like that anymore. As the working world has evolved, so have our expectations. It seems there is much that money alone doesn’t cover, such as dreams, ambitions, peace of mind, feelings, a sense of recognition, job satisfaction, etc. And these supplementary aspects are different for everybody.
Initially, companies didn’t pay too much attention; a salary was a salary. Then along came things like pension and medical aid, and everyone thought this was tops. However, staff – good staff – were still leaving. To keep good workers, and keep them from competitors over the years, companies have had to offer greater and greater compensation to workers to keep them happy and retain them in their valuable roles needed for the survival of the business.
In the originally clear-cut transaction between work and pay, there now lies a minefield of emotion, perception and circumstance. To examine the ever-expanding package of rewards beyond salary that has become part of the search for individual happiness, we need to look at the evident factors of emotion, perception and circumstance.
Perks, packages and generation gaps
In the last few decades benefits have grown to include educational opportunities, housing assistance, longer leave application, assistance with home office working, child care, performance bonuses, long service awards, life and disability insurance, etc. For many the package is becoming more valuable than the salary itself. This is good news for employers who are making innovative leaps in their offerings. There is also a tendency to individualise packages – both from a company perspective as well as individual ambition, tailoring offerings to meet unique needs.
None of these ideas have happened in an instance, but have evolved over a number of decades that have seen changes in a see-saw of market economies – putting more power in employees’ hands at one point, and greater choice for employers at another. There has been considerable change in the way people respond to rewards – with distinct differences seen in the various age groups within the workforce.
Baby Boomers: Possibly the least demanding generation, Baby Boomers were satisfied with basic benefits such as pension, medical aid, and educational assistance for children. They held greater appreciation for their jobs, bound by loyalty and steady employment. These are people who remained focused on the traditional benefits programmes of healthcare and company support for their future retirement. As they were nearing the end of their working careers, there was rarely room for dissatisfaction; ambition was driven more by reaching a healthy retirement age, and finding ultimate satisfaction in a life of good service.
Generation X: Things began to change the status quo with this generation. They were beginning to seek a greater work/life balance and were more focused on career growth and personal training and development. While stability and job satisfaction were still valued, ambition was beginning to nudge their preferences, and Gen X were prepared to step up the pressure on companies wanting to retain their expertise. Flexible working hours became more acceptable, together with more choice in health plans and assistance with their children’s education.
Millennials: The change here is marked – introducing a workforce that wanted to genuinely feel their work was valuable and made a difference – either as to how the company progressed, or how society benefitted in general. Recognition was more important than money – knowing that their work would have a positive social influence was an important aspect. A company’s social responsibility programme became a drawcard for top employees, making career drive and employer branding an attractive mix.
Generation Z: Flexibility and autonomy within their roles holds high attraction for this generation. They are less interested in insurance than they are in the way they are allowed to work. Career growth is important – and must be fast and furious, otherwise they lose interest. They are not the generation of loyal plodders, they prefer change, development and a variety of challenge. Career planning – not only promised but steadfastly adhered to – would be a crucial element within their rewards proposal.
The package – and beyond
- It’s no longer a one-size-fits-all in the remuneration business. To remain competitive, companies should think innovatively about tailoring their packages to personal needs and expectations where possible. This includes the traditional and comprehensive range of benefits, but also additional elements specifically targeted to employees with differing needs and circumstances. Determining which benefits matter most to individuals, will assist in crafting the best package with regard to employee satisfaction and retention.
- Basic benefits are retirement and healthcare funding. In both instances, employees should be consulted on choices of investment, indicating the percentage of salary they wish to contribute. Secondly, employees should have advisors to hand who can guide them through the purchase of their own supplementary pensions or medical insurance. Additionally, in order to persuade top talent to stay, basic benefit employer contribution should be seen as generous when compared to other employer offerings in the market.
- The key to building an attractive package beyond the basic benefits is consultation. Additional benefits can be customised with regard to: life insurance, disability and severe illness cover, training and education, recognition and awards, a share in the business through stock purchase plans or share allocation, flexible working hours, time off for volunteering, career planning that includes clear goals and mentoring.
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