Finding the right people and keeping them grows increasingly difficult. Believing that the current crop of workers seeks the ability to move fluidly between employers after years of massive cost-cutting, firms have failed to recognize that most workers look at employment from a total rewards perspective.
“The right combination of rewards will keep a valued worker from leaving,” says Laurie Bienstock, Compensation Practice leader at Watson Wyatt Worldwide in San Francisco. “It comes as a surprise to many companies that 22 percent of employees in a recent survey said that the quality of an employer’s health care program would figure strongly in their decision to leave.” Smart Business spoke with Bienstock about the employment landscape and what businesses need to consider if they want to attract and retain a strong work force.
What is the most significant change in the employee-employer relationship?
Generally, we have a more portable work force today. However, after the dot-com bust here in the Bay Area, it became harder to move around in jobs. Our survey shows that the majority of employees now want job stability something that many employers cannot offer.
There is a disconnect between employers who continue to think that employees want job portability and their employees, who are saying that what matters most is the opportunity for a long-term career.
In addition, there is a rise in the value placed on certain benefits that come with staying with one employer for a long period of time. Workers now place a greater premium on the quality of their health care packages and the quality of a firm’s pension or retirement plans.
Interestingly, companies we surveyed said they did not think their top employees would leave just because another firm offered a better health care package. Higher pay is of utmost importance to most workers, probably because many understand that they now must contribute to their own health care and retirement savings.
How can employers bridge that disconnect?
Understand who your employees are and what they want from a ‘total rewards perspective.’ No single factor creates an environment that makes employees want to stay with a firm; it is a combination of elements that includes a work environment that fosters commitment and employee engagement. Firms with no retention problems report that their cultures support work/life balance, and that managers do a good job of clearly linking individual employee performance with the success of the organizations themselves.
With competition increasing in the Bay Area and a consequent low unemployment rate, employers need to recognize that a valued worker may leave for more money and a better benefits package from someone else, but also that the environment in which they work remains a key factor in retaining top talent.
What are some managerial assumptions that do not correspond with reality?
One myth that employers hold dear is that promotion opportunities and a solid manager-employee relationship help retain top performers. We see that, while these factors are important, they are taking a backseat to some immediate, tangible needs, such as pay, health care and retirement benefits.
The current state of affairs in this country is that we have an aging work force, and it is getting savvy. It’s becoming increasingly important to look at who is in your work force now and who will be in it 10 years from now.
More and more, companies will discover that they need to find workers in their 40s and 50s to replace retirees. And some of those replacements could include people who have left the working world, such as women in their childbearing years, who may now also need flexible hours. So a firm needs to consider what kind of program it may need to motivate people to join the company and stay there while also creating a program that fits with the economic realities of the organization.
Is there one overarching consideration that most employees especially value?
We call it creating a ‘line of sight.’ Can an employee see how his or her contributions make a difference to the firm’s success? A short-term incentive plan or a bonus plan can be fiscally advantageous methods to link individual performance to the success of an organization. This is where companies need to develop and communicate measures of success. Many incentive plans establish a scheme that pays out at a certain level if the firm hits a particular profit level. Employee payouts are linked to both an organization’s success and having met individual goals.
LAURIE BIENSTOCK is the Compensation Practice leader in Watson Wyatt’s San Francisco office. Reach her at (415) 733-4311 or firstname.lastname@example.org.