When a down economy finally shows signs of recovery, companies typically can expect a period of higher turnover as the balance of power shifts between those hiring and those seeking employment.
But as companies position themselves to capitalize on the turnaround, they’ll first need a preemptive strike against turnover. One way to reduce a talent exodus during recovery is building an extensive total rewards strategy, or employment value proposition, that’s so magnetic employees will not only stay, they’ll drive themselves toward new levels of loyalty and engagement.
“Incentives play a powerful role in an organization’s compensation strategy,” says Robert Hoyland, vice president/general manager, USAA. “Well-designed programs provide both a strong attraction ability to get qualified candidates in the door and then a strong motivation factor for employees to perform while on the job.”
Smart Business recently sat down with Hoyland to learn more about the role of incentives in today’s workplace, and why employees highly value a company’s commitment to their health and well being through world-class benefit programs.
How has the role of incentives changed in today’s workplace?
A total compensation package encourages high levels of individual performance as well as commitment to your company’s overall success. In addition to highly competitive compensation, benefits that begin on the first day of employment, and other perks like tuition reimbursement, a retirement savings 401(k) plan, business casual dress code and state-of-the-art fitness and recreation programs now are huge motivating factors for employees. Today’s incentives even include a host of on-site conveniences including cafeterias, post offices, child development centers, company stores, free covered parking, and wellness programs like free annual health risk assessments and clinics, flu shots, preventive care benefits and many more.
Is non-salary compensation a motivator for every employee?
For many employees, it is. However, the extent to which each component of a company’s total rewards package motivates employees is unique to each employee. A graduate fresh out of college will certainly be motivated differently than an individual with a family who is saving for children’s college educations and retirement. You should strive to provide a comprehensive total rewards package that can motivate all employees, including baby boomers and Gen Y-ers.
What programs may entice employees to accept less financial compensation for better benefits and incentives?
Really, there shouldn’t be a need to choose. You should have both highly competitive compensation and world-class benefits. However, with all of the news on the country’s health care debate, a company’s medical plan certainly comes to mind. Retirement programs are also a strong component of an organization’s total rewards package. Depending on an employee’s particular situation, either one of these may be more highly valued than the base salary.
Programs promoting work/life balance are also highly valued by employees. You should understand that employees have lives outside of work and sometimes it is difficult to juggle all of the personal demands that come from being in a dual-career family, a single-parent, or part of the sandwich generation that is caring for children and older parents while working. Here, we have some unique resources to help. Child and elder backup care can provide a temporary solution for care of loved ones while employees need to be at work. Our ‘My Helper’ program is available to assist employees and their family members with errands, reservations and special events planning. Finally, approximately 25 percent of our employees choose to either work remotely or have a flexible work arrangement like four 10-hour days, four-and-a-half days or a 38-hour workweek, flexible start and stop times, or work part-time schedules.
Are incentive programs good ways to retain top talent regardless of market conditions?
Certainly, even in a down market, incentives can provide a strong retention hook for an organization’s top performers. Highly skilled, high-performing individuals, regardless of market conditions, will always be in demand. Almost all companies understand this fact. The challenge for a company lies in the proper design of its incentive plans.
How is corporate culture tied to effective incentive programs?
A company’s culture is unique, and the metrics that determine success should be directly linked to that culture. Leaders need to be able to articulate an incentive plan’s measures of success so that all employees understand what they are being measured on and how to achieve success. From the moment an employee comes to work at your company, that person should be keenly aware of whom he or she serves. In our case, that’s the men and women of the U.S. armed forces. We routinely showcase in our internal communications employees who embody our mission and core values and demonstrate our ‘My Commitment to Service’ principles. We know that our employees truly connect with our members and our mission because we’re consistently recognized for our exceptional member service. These awards are given to us because of our engaged, dedicated and loyal employees, who focus on meeting members’ needs, not selling them products. Building an extensive total rewards strategy is one key to building the loyalty and engagement needed to outperform your competitors during this recovery period and beyond.
Robert Hoyland is vice president/general manager of USAA. USAA, which employs approximately 1,700 people at its Tampa office, is a leading provider of insurance, banking and financial services for the U.S. military and their families. This past June, USAA was the recipient of Tampa Bay WorkForce Alliance Business Excellence Award for the Growth Business Award. Reach him at (813) 615-5701 or firstname.lastname@example.org.