End of financial year is almost upon us, and that means the inevitable: salary negotiations.
Businesses are finding it increasingly difficult to retain top performing employees. The 2016 Hays Salary Guide found staff turnover has already risen 2 per cent year-on-year to 29 per cent.
According to recruitment firm Robert Half, 58 per cent of Australian office workers are likely to look for a new job in 2016, with nine out of 10 business leaders saying it’s challenging to find skilled and experienced professionals.
The firm analysed Australia’s current ‘hiring climate’ for its 2016 Salary Guide, and found an influx of new jobs being created “could underpin a rise in voluntary staff turnover”. And the guide also found 19 per cent of employees would look for a new job if denied a salary increase.
For small and medium-sized businesses, competing with the deep pockets and unlimited resources of larger companies can make retaining or attracting the cream of the crop even more challenging.
One approach that doesn’t necessarily involve digging into the coffers is that of offering employee benefits.
Ben Thompson, the CEO of free HR platform Employment Hero, has some advice on how businesses can offer additional perks to their employees.
“Rather than just discussing a pay rise, why don’t employers also talk about employee perks?” he says. “It doesn’t cost anything to deliver most of these employee benefits, and it may improve an employer’s ability to retain top performers because it gives them more discretion in how they can reward them.”
While Thompson says benefits can’t take the place of a salary review, they can be used to sweeten the deal for employees and make salaries and bonuses go further.
However, one size doesn’t fit all and not every benefit will appeal to all employees. Thompson says it is important to understand where your employees are in life, and offer tailored benefits they will really value.
“We’re looking at the entire lifecycle of an employee – at all of their major expenses – and we’re promising to help make them better off, to help save them money on some of their major services,” Thompson says.
“We already have 25,000 employees in Employment Hero and – this is private, and never shared with any third parties – for those employees we know their age, their previous employment, their salary and their employment status.
“Based on that information, it’s possible to present employees with benefits that are relevant to them.”
Tailor made employee benefits
Thompson gives the example of franchise businesses, that often employ young and first-time employees. He says they find that telecommunications benefits are particularly attractive to a younger demographic.
“For a 16 to 18 year old, a cost-effective mobile phone plan, potentially a mobile handset or tablet, gym membership and entertainment discounts are some examples of appealing benefits,” he says.
As employees move into their 20s and 30s, products such as health and life insurance, utility subsidies such as gas and electricity, credit cards, novated leasing and mortgages become important.
“Older employees may be looking toward retirement or they might have some long-service leave, so they’ll be looking at perks such as holidays,” Thompson says.
If you get the benefits right and make them an integral part of an employment package, they can become a powerful retention tool. It can make employees think twice about leaving an employer, and weigh up that they’re really walking away from something of significant value, says Thompson.
Avoid the job title pitfall
Thompson warns against giving people important sounding job titles in order to placate them.
“Don’t give people the wrong titles,” he says. “For example, if someone is at the level of a marketing coordinator, don’t call them a marketing manager, because next year, they’ll do a comparison with marketing managers and will argue that they’re not getting paid enough.
“And that’s the employer’s fault, because the title doesn’t match the experience.”