Non-financial rewards including career development and flexibility, as well as pay have the greatest influence on employee behaviours; reveals a new report.
The Watson Wyatt Total Reward Survey 2004 found that two out of five employees are considering moving on within the next year.
Respondents’ reasons included a lack of career development, promotion prospects and a poor working relationship with their manager as well as a lack of opportunity to be creative.
Eddie Hodgart, head of total reward consulting at Watson Wyatt commented:
“This contrasts with the more politically correct reasons given by employees when they actually leave such as job satisfaction, better pay and better opportunities. Rather than develop a retention strategy geared to these latter points, is there not more value in companies focusing their efforts on ensuring employees do not feel the need to look elsewhere?”
Recognising the value of the intrinsic elements of reward, 80% of employers vowed to take a more holistic approach to managing their reward programmes.
Hodgart warns that employers may face a future skills shortage and the challenge will therefore be to hold onto key staff.
“The retention of these individuals goes beyond the provision of traditional rewards and more and more innovative approaches will be required to recruit and retain these key individuals going forward,” he said.
Rebecca Clake, Chartered Institute of Personnel and Development (CIPD) adviser told HRZone: “We would agree that pay is certainly not the only factor which causes people to look elsewhere. Our Recruitment, Retention and Turnover Survey 2004 found that retention problems are on the increase. Seventy-two per cent reported retention problems in 2003 and this has risen to 77% this year.
“The most important thing really is to understand why people are leaving. Often the assumption is that pay is the factor. It is an easy answer to give. We would recommend exit interviews as one way of getting data but there are limitations for example an employee might have the idea at the back of their mind that they need to obtain a good reference which might cause guarded responses. There are ways to mitigate this.”
Clake goes onto list the possible options including HR conducting exit interviews, anonymous surveys or third party intervention.
“One of the most vital things for managing retention is looking at how satisfied the workforce are, career development, quality management and flexible working hours for example. An employee satisfaction survey allows an organisation to take the temperature in the organisation before it reaches the stage of people having to hand in their notice. The issues may not be the same across the board. Training could vary quite widely for example. These issues will determine what your reward strategy should be,” she said.
Nearly 3,000 employees from 220 private sector employers were surveyed for the Watson Wyatt Total Reward Survey 2004.
One Response
Holistic rewards
It is encouraging to find a report on this website supporting a position I and my colleagues have espoused for years, but one which a lot of employers have yet to take on board. There is loads of both academic research and real-world practical experience that shows that satisfying people’s values and aspirations at work is highly motivational and is the way to get good performance and high levels of retention. I just want to add two points. Exit interviews are only informative if conducted face to face by outside agencies and are strictly confidential. Asking leavers to fill in questionnaires does not work. I support the use of survey research to keep in touch with your people’s experiences at work, but qualitative methods are the only ones that yield much useful information. Questionnaire surveys don’t. I’d be glad to hear from anyone who would like to exchange views and experiences. Email me at pburton@statec.co.uk.
Peter Burton