Change isn’t a bad thing; it’s important to get a regular flow of new blood in any business. However, a lot depends on how often this new blood is required and the speed at which it passes through the company. I’d say that the general rule of thumb is approximately 15 per cent when it comes to staff turnover. If the figure rests below that mark each year, regardless of sector, then you’re probably looking good. However, you do have to look at the cross-section of individuals in that mix. If they’re all top tier, best performers from some of your most senior positions, that’s not so good and indicates a weakness in your company at that level.
It’s pointless trying to retain staff after the rot has set in. Retention is about meeting staff expectations, right from the beginning, and providing a good remuneration. Any long service reward is the icing on the cake and should reflect the value of that particular member of staff and his or her efforts. Don’t just pay lip service. A cheap and thoughtless long-service reward can have a detrimental effect – a carriage clock doesn’t cut it these days !
To insure yourself against employee poaching and the itchy feet of those looking for career advancement or more money, adopt an open door policy and talk to your staff. Hold regular status reviews and encourage individuals to express what they want from the job, what they’d like to change and what they expect from you. It’ll give you an inkling of how best to reward and motivate them and increase your chances of holding on to talented and skilled, loyal workers – the ones you want to keep.
We’ve moved on at least a couple of generations from the ‘job for life’ brigade and we’re now living in a society where it’s not unusual to change careers throughout your working life, never mind your job. People move around a lot more and are prepared to take risks and move on to the next challenge in order to get promotion, job satisfaction, a bigger salary etc. Rewards for long-service are not going to hold them.
Such companies who offer extra leave for each year of service and / or specific bonuses will attract staff in the first instance but will have to go beyond the frills to retain them. Enhancements are attractive in the short-term but, if the fit isn’t right, that will be as far as it goes – short–term.
Many young people coming into the workplace now have a very different view of what they expect from a career than previous generations, and many companies who are looking to hire them have a very different view of how they will benefit the most from the talent they bring in.
As with all things in life, it is about balance. Having people in your organisation who have served you well for many years and display the attitude and values of the company will have a great influence on the younger staffers who will be (as all young people generally are) running on enthusiasm, looking to make their mark and sometimes making decisions without checking the facts first. ‘Dynamic’ is the word normally associated with these ‘young’ns, and their drive is to be applauded. It makes others sit up and think, and it brings a new vibrancy and energy to the business. Coupled also with their understanding of technology, the emerging generation can enhance the capabilities of a company.
The importance of having long-term staff is that they truly understand the nature of the business. They know how each department works and who does what. In short, they know all the wrinkles.
A company that looks after and rewards loyal staff will have a high retention rate, lower recruitment fees and a stable and consistent approach to the business. That being said, no company can function in a fully effective way if there is no new blood coming in. Sourcing talent from outside the business can bring fresh ideas and new ways of doing things, which in turn result in higher performance and growth.
This is the tricky bit, because this is where the balance comes in. People look at fast growing high tech businesses, run by t-shirt wearing geeks and think, ‘wow! we must get these people into our business, just think what they could do for us!’
It’s a good point. The question has to be though, that if you have a business full of young, very bright and forward thinking people, you have to consider how that energy and inventiveness is harnessed and directed towards the business model of the company. To do that requires experienced, people-centric and commercially astute individuals to whom the newer members of the team can turn to for advice and mentoring. New people coming in, if hired not just for their knowledge and qualifications, but also for their attitude, flexibility and personal values will, if guided in the right way, become the talent pipeline for the future.
Many companies who give long service rewards to maintain a loyalty factor with their staff, are having to rethink this strategy because of the age discrimination laws which came into force in October. This is not my area of expertise, but it appears that under a five-year period of employment, long service payments are exempt, above that, the company has to provide evidence that the payment is of benefit to the company. Now it may be that five years could well be the average time for people to stay at a company, but rewards for loyalty should still be given as they signify the value to the company that the employee has contributed. Delivered in the right way it becomes another reason for this person to want to stay.
Looking to the future, today’s workforce certainly wants to experience fresh challenges and perhaps even have completely different careers during their working lifetime. And as their personal circumstances change, so will their job preferences.
What about the companies that they work for? How many of those companies will still be around in years to come? Technology, an evolving mobile workforce, coupled with ever-changing global demands on service and products, will inevitably affect how a company hires and rewards their staff, which in turn will have an impact on what the workforce of the time will be looking for in a career.
I believe that successful companies will always have their people at the heart of everything that they do. They will understand the balance needed to have a fully blended, multi-talented and motivated workforce. Young, old and everything in-between is what’s important. Length of service will become something that has a natural start and finish, always evolving to the benefit of all.