Money Talks. Or Does It?

Innovation Board

Since the economic crash of 2008, the protracted recovery and period of growth has brought with it an increase in potential pay and opportunities for job seekers across a number of sectors. While this is great for employees, what can bosses do to hold on to their top talent and keep their competitors at bay?

The Battle for Retention

According to the latest edition of Paydata’s UK Reward Management Survey, 51% of employers had experienced difficulties retaining people in the last six months, with 52% expecting similar difficulties in the next 6 months.

Retention is seen as a particular problem within the construction sector, with 66% of organisations expecting retention difficulties in the next 6 months, driven by a highly competitive pay market.

While this data doesn’t suggest a mass scramble for the exit door, when balanced against the difficulties in hiring people with a specific skill set, retention takes on an even greater importance.

Filling the Skills Gap

According to Recruitment Buzz in specific disciplines such as IT and Digital Media, employers are experiencing recruitment difficulties which are aligned to higher than normal pay increases within roles with key skills.

In these sectors that are experiencing a shortage of skilled, experienced workers, retention is even more invaluable as it can be very costly to either replace somebody at a similar level or train somebody up to replace the vacant role.

Alternative Compensation

With this in mind, it’s no surprise to see IT and Digital Media companies leading the way when it comes to alternative ways of compensating their employees, with schemes such as unlimited holidays and efforts to create a more relaxed workplace common within these sectors.

In a sector that is seeing increasing demands for a shrinking skill set, it’s vital to come up with pro-active ways of retaining your top staff when an endless budget for wages isn’t an option.

Driving motivation and happiness at work without resorting to increasing pay is something that can improve retention in many companies. According to James Brook, Co-Founder of the Strengths Partnership, taking an individual approach is critical.

He recommends:

Build a good awareness of strengths – ensure that people understand what they’re good at to give them more confidence and resilience
• Take action to optimise strengths – ensure people get challenging opportunities that play to their strengths and give them the guidance and support to succeed
• Minimise performance risks that undermine performance – work with the individual to understand ‘limiting weaknesses’ and put strategies in place to reduce the impact of these
• Build agility to adapt strengths and talents to new situations – ensure that people are able to use their strengths in different situations and have confidence in their ability to do this
• Celebrate achievement and build momentum for future success – don’t take people’s achievements for granted and ensure you recognise people’s personal wins

What we think:
When it comes down to it, people will look to leave their jobs for one of two reasons:

1. They aren’t happy in their role
2. They can get more money elsewhere

Very few companies are able to summon a huge budget for wages, and while not every sector is experiencing high growth, there are a number of areas experiencing skills gaps and higher wage increases than the norm.

If you’re concerned about retention, ensure that your teams are happy in their roles, feel appreciated for the work that they are doing and are happy in their working environment. If the rewards elsewhere aren’t that much greater financially than their current role, then this will pay a huge factor in your ability to keep your team together.