How to Improve Staff Retention
Retaining quality employees is one of the greatest issues facing business today. Not only are good people hard to find, the time and cost to replace experienced staff is now being estimated as up to 150% of their salary, when recruitment fees and the on-costs of training are taken into account.
Staff engagement is another key business concern, with Gallup Australia research in 2006 identifying that an astounding 61% of employees are not engaged and 18% are actively disengaged. That’s nearly 80% of the Australian workforce!
No matter the industry, people have the same basic needs - to feel valued and recognised for what they do and the contribution they make. When these needs are fulfilled, people are more likely to be happier and more engaged with their work, their colleagues, their managers and the organisations they work for.
Therefore engagement is a key to employee retention. There’s a strong link between what people THINK about their organisation (eg its values, the way it conducts business) and the emotional connection they have with it – that is, the way they FEEL about it. When combined, these two things have a huge impact on an employee’s overall commitment and level of effort - that is, the way they ACT or behave at work.
So what can you do to change the way your employees think and feel about your organisation so they’re engaged and want to stay? It’s important to provide an attractive overall Employee Value Proposition, and this incorporates Incentives and / or Reward & Recognition.
And the benefits of such a program are threefold – it will not only improve employee engagement and help with retention, it can also maximise the potential of your people by driving performance, thus creating a virtuous cycle of positive reinforcement. When your staff are engaged with, and enjoy, their work, they will stay longer and perform at their peak, which will result in greater organisation performance and higher morale.
So which type of program is going to work best for your organisation … Incentives or Reward & Recognition? It depends on your objectives and what you’re trying to achieve.
Incentive programs are generally used to increase sales, revenue or market share by internal sales staff or members of a company’s channel network (eg dealers, distributors, etc). Incentive program objectives could include:
- Increased sales volume
- Growth in profit
- Greater revenue
- An increase in quality business referrals
- Inventory management improvements
- Improved cash flow
Reward & Recognition programs are more commonly used to motivate and inspire employees in non-sales roles to improve performance and productivity or to change behaviour.
Reward & Recognition program objectives could include:
- Emphasizing values-based behaviours
- Recognising length of service with the company (5 years, 10 years, etc)
- Encouraging innovations / ideas-generation
- Welcoming suggestions for change / enhancements
Effective Incentive or Reward & Recognition programs have a structured framework. This will ensure that no matter where the program is applied throughout the organisation it will have the same parameters and participants will be assessed consistently. If a program is not consistently applied, it risks being seen as unfair and it will quickly lose credibility among participants.
However, whilst an overall framework is vital, it’s just as important to provide some flexibility at a divisional level within this framework. By allowing the divisions to tailor aspects of the program to their own circumstances, they will be more inclined to support and champion the program.
If your organisation has one or more existing programs, it’s a good idea to employ a specialist Incentive and Reward & Recognition provider to conduct an audit of these and make recommendations on streamlining, consolidating or enhancing your current offering and possibly rationalising them into one single reward currency that can be accumulated over multiple earning opportunities. This means that instead of providing disparate reward options across multiple programs, all of the individual rewards can be accumulated and put towards a much more powerful reward range.
In conclusion, Incentive or Reward & Recognition programs help to deliver increased engagement which results in improved employee retention. By implementing a formalised program, not only will your employees become more engaged with your organisation and as a result, stay for longer, they will become better performers which will ultimately translate into improved bottom line results.
Author Details
Karen Rowell is the Managing Director of Trésor Reward & Recognition Pty Ltd. Trésor is a specialist provider of Incentive and Reward & Recognition programs designed to attract, retain, motivate and inspire employees to greater levels of productivity and performance.
Karen Rowell – Managing Director
Trésor Reward & Recognition Pty Ltd
P: (03) 9004 2295
E: karen.rowell@tresor.com.au
W: www.tresor.com.au