What your staff are really worth (part 2): reward and retain

• Fran Molloy
• 8 February 2010

Photo credit: Getty Images

As the economic climate improves, staff retention rates begin to drop. Staff churn can be triggered by something as simple as media reports on companies announcing they're ready to hire more people, backed up by an increased number of job ads online and in the newspapers.

As the market for good employees hots up, it's a good time to make sure that the staff who are key to the success of your business are adequately rewarded.

And while many small companies struggle to compete on a flat dollar scale, there are often other incentives that can keep staff loyal.

"One thing that everyone is short of is time," says employer David Ansett. "For many staff, time can be more valuable than hard cash."

CHALLENGE: Retain your high performers

According to exit interview specialist Lenorë Lambert, Director of Exit Info, high performers are up to 12 times more productive than average performers.

Clearly, these are the staff that any business really needs to retain; but a slow economy does not make it easier to keep good people.

Her reports suggest that the recession has not changed the key reasons that top performers change jobs. "For most, it is still about career development and interest in their work," she says.

Downturn is no guarantee of retention; in an unstable economy, good performers will often leave voluntarily because of lack of job security with their current employer, she says.

And an increasing number of staff are capitalising on the slowdown to take time out—choosing to travel, take a break or reconsider their career direction.

It's not all bad news for business owners; in a slow economy, employees usually take longer to decide to leave.

But as signs point to recovery, this is a critical time to secure employee loyalty.

SOLUTION: Offer meaningful incentives (it's not just about money)

David Ansett heads Storm, a Melbourne branding agency that focuses much of its employee effort on a multi-layered staff incentive program.

Ansett says that the incentive program was developed after feedback from most staff indicated they would prefer experiences over a financial bonus.

The highlight of the incentive scheme is a biannual reward program that kicks in when both team and individual goals are met.

"So far we have taken the team ocean kayaking in Fiji and walkabout in the Northern Territory."

1. Team events improve relationships

Storm's team adventure scheme not only motivates staff to perform well to earn the reward, the adventure reward itself delivers an extra pay off of cross-team relationship building, Ansett says.

"Teaming up two people who weren't working well together in an ocean kayak for three days of tough paddling was a high risk, high reward strategy."

A range of other incentives include Snack Day, birthday holidays (members get a day off on their birthday) and a group charity art show.

And while retention, reward and goal achievement are the high-visibility results from the scheme, he says that the main aim goes far deeper.

"It's about life-balance, sure. And it's also about making work a valuable part of how they live their lives rather than the thing they drag themselves out of bed for to pay the bills."

2. Gifts keep on giving

Dominic Toledo, who is general manager at performance improvement specialists The Mint Organization, argues that non-cash incentives are more effective than cash to encourage good performance.

Because emotional commitment to the work is one of the key factors behind good performance, he says that non-cash rewards (like a set of golf clubs or a holiday) are easier for staff to visualise and therefore they generate an emotional (rather than logical) response.

He says that employers who create incentive programs in partnership with their employees that combine cash and non-cash elements usually see excellent results.

3. Make life easier and performance increases

When you have more than a dozen staff, the effort involved in setting up an employee reward program is justified; but very small businesses can still use innovative techniques to keep their employees happy.

Scott Beattie is business development manager for Cube, a mortgage broking company with a staff of just the one PAYG employee - that's Cheryl, who looks after all of the administration.

"We can't always match corporate salaries, but we can do things that make work far more pleasant and ultimately reduce costs for our employees," he says.

As well as Cheryl's base wage, Beattie has given her a mobile phone (and pays for the plan), a laptop, and an E-Tag for her car.

Beattie works from a home office and Cheryl lives nearby, so she has no commuting or parking costs.

Each year, just before Christmas, Cheryl gets an additional cash bonus for meeting performance targets, usually $1000.

On top of that, although she's not directly generating revenue, she also shares in the profits, earning a $10 commission for every loan that settles.

4. Work the floor for ideas - and apply them

Rachel Power, who runs SpySee Customer Experience Experts, facilitates employee sessions within organisations to identify and resolve employment issues.

She says that great benefits result from involving junior staff in coming up with ideas to resolve company problems, with employees happier when their skills are fully applied and they feel that their ideas are listened to and acted upon.

"When we asked staff how they would like to be rewarded, while the obvious first answer was ‘a raise', other responses included a team BBQ, allowing staff to interact in a social environment," Power says.

Another client strategy, for a club, involved management leaving their offices and working at the front line - in the bar and restaurant - for a day so that they could get a better understanding of employee's needs.

"This program boosted morale in staff, management and customers, provided an electric atmosphere that staff enjoyed being a part of, and staff retention became a much smaller issue for this particular business," Power says.

5. Time off improves work time

Sue-Ellen Watts, who runs an HR consultancy, believes small companies can always attract and keep good staff.

"They have a fantastic opportunity to implement individual retention strategies for their staff that big businesses cannot do because of their size."

She has created reward cards for her clients to give their staff, with printed incentives like, "A paid day off" or "Start work at 10am."

"We use them as giveaways for our clients to use - but also to show them how easy and inexpensive it is to motivate and retain their employees," she says. #