By John Sylvester, executive director of P&MM
In a buoyant employment market, a key to understanding staff retention is getting to grips with the fact that it is simply no longer good enough to expect employees to be grateful for having a job
It is just as crucial to define the employment proposition in attractive terms and market it in the same spirit that the business is marketed to its customers.
We can no longer afford to ignore the fact that higher staff turnover and absenteeism is a measure of poor motivation. Improvement in these areas is a product of getting the package right.
In real terms 'employee engagement' is all about employees proactively driving the business forward, generating success, feeling personally rewarded by doing this and benefiting in real terms from the opportunities that are created by their efforts - and this is what we are after - the classic win / win.
These issues not just limited to morale and the force that propels a company ahead of its competitors. Lack of retention has a direct impact on the bottom line - recruitment and productivity costs.
Recent research from the CIPD indicates that the average cost of turnover per employee is now £8,200 rising to £12,000 for managers.
The cost of absenteeism is also significant, estimated by the CIPD to be £559 per employee private sector and £680 per employee public sector. So it is not surprising that many UK businesses are seeking solutions.
Furthermore, economic trends and the laws of supply and demand are simply driving up the cost of human capital.
The office of National Statistics states that the number of job in the year to June 31 increased by 248,000 - the highest since records began and with 82 per cent of jobs now in the service sector, never before has the cost of human resources been more significant to UK businesses.
Businesses are responding to the need to attract and keep top talent by adding value to their attractiveness as an employer through a variety of employee benefits to the basic pay package.
Pensions, extra holidays and gym memberships are a great place to start, however, they will only ever be truly maximised when viewed as part of a strategic motivation solution.
So what do we mean by a strategic motivation? Not surprisingly we need to start with the strategic objectives and direction for the business. There needs to be synergy between how customers and staff see the business.
It is no secret that those businesses that have strong strategic direction and leadership in their core marketplace tend to be more successful as employers too. The real magic comes from engaging employees in that vision and making them a central part of the success of the organisation.
Salary and value based remuneration does come first. If employees believe that their basic needs are not being met, any incentive scheme to drive motivation will only be seen as papering over the cracks. But, it is also a mistake to assume that "Economic Man" dominates the workforce.
Once a fair and equitable remuneration scheme is in place, there are much richer pickings for an organisation by tapping in to the emotive and less rationale drivers that we all have inside ourselves.
We only have to look at the work of some of the classic behavioural scientists (Maslow's hierarchy of needs, Herzberg's hygiene factors & motivators, Mayo's Hawthorne experiments, McClelland's X Y theory) for proof.
So, with the strategic direction clearly defined and the basic remuneration and benefits package in place, we can start to use classic motivation techniques to engage employees in the ongoing success of the business
In broad terms, this involves breaking down the strategic objectives so that individuals can understand the part they play in the future of the business.
It involves a clear definition of what 'good' looks like. It involves clear measurement and monitoring of performance and it involves reward and recognition for those who achieve and exceed their goals.
But more than anything else it requires a good understanding of motivational techniques and how to effectively communicate the proposition.
For many years now businesses have understood that there are major benefits in marketing their product proposition to customers rather than simply trading on price. The same is now true in the employment market.
Employers must learn how to create and market an added value employment proposition to their employees and prospective employees.
This convergence of HR management, marketing and communications technology is creating a whole new and exciting discipline. Getting it right has clear bottom line benefits for the employer.
P&MM specialises in the development, implementation and management of employee benefit, motivation and incentive solutions. P&MM works with a number of major UK blue chip companies helping them maximise the return on their valuable human capital.
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