With pay packets expanding due to worker and talent shortages - not to mention boom-time wages on offer in Alberta - businesses of every size are wondering how they'll keep their employees without breaking the corporate bank.
"Money talks," says John Tompkins, principal and senior benefits consultant with Toronto's Hewitt Associates, a global human resources services company. But it's only one of many factors that attracts employees and builds loyalty, he adds.
"Most people move for reasons other than money," says Michael Stern of Michael Stern Associates Inc., an executive search firm in Toronto. Often employees leave because they feel underappreciated, their contributions unrecognized.
There are many ways to show appreciation and recognize contributions other than with huge wage increases.
That's good news for small and medium businesses, which employ 80 per cent of Canadian workers and create 85 per cent of new jobs. And also for big businesses that often have less salary elasticity than perceived.
But before rushing in to make changes, it's a good idea to take stock first, say these two experts, then tailor benefits to fit your workforce.
Stern advises identifying the keepers - "employees you'd be devastated to lose."
Then determine the risk of losing them. Every company has "an employee who will move at the drop of a hat, the very loyal employee you've got for life and the influenceable employee," Stern notes.
Smart employers know they won't have much long-term success with employees in the first category and concentrate their efforts and resources on the keepers who might be influenced.
What you can do to influence them to stay depends on the stage of their career, says Tompkins.
"There is no one-size-fits-all solution," he says, adding what may be seen as a wonderful benefit to one group will just be a burden to another.
For example, a golf-club membership may be just the ticket for an empty-nester who has personal free time to make use of the perk. But it could be yet another demand on precious free time of those caring for small children or ailing parents.
The notion of treating all employees equally is old hat. The new buzz is about flexible benefits - a tailored menu of choices covering everything from work weeks to working hours, paid and unpaid sabbaticals and time for charitable work, fitness facilities or memberships or credits and even office concierge service.
Even once-universal dental plans and extended health-care benefits are moving to the optional column.
Three-quarters of Canadian employers are having trouble attracting or retaining employees, according to results of Attracting and Retaining the New Workforce, a new Hewitt Associates online survey of 232 Canadian employers of all sizes and many sectors representing 582,717 workers.
Nearly 45 per cent 'fess up to having problems with both. The problem is most acute in Alberta, where 97 per cent of employers surveyed have trouble keeping positions filled.
Tailoring benefits to meet employees' needs and desires is the latest strategy for competing for a dwindling resource - enthusiastic employees. Now 38 per cent of employers offer flexible benefits, but 64 per cent of them expect to be offering such benefits in just three years.
Flex work and work/life balance were identified as having the most impact on attracting and retaining employees by 23 per cent of employers responding to the Hewitt survey.
Flex hours and a compressed work week were cited by 17 per cent; pension and retirement savings by 12 per cent; and health-care benefits by 11 per cent.
Only six per cent of employers said money or additional time off would have the most effect.
Offering flexible benefits means all employees are not going to be treated equally, says Stern. "You want to make sure the rewards are rewarding for the people you're giving them to."
To tailor benefits, says Tompkins, consider the needs of the various generations of employees.
"Employers were spoiled by the huge pool of Baby Boomers who already had work experience," said Tompkins.
"But the pool is starting to dry up and the next generation does not have the same work ethic."
Succeeding generations won't put as much value on current benefits menus.
"Boomers may appreciate dental coverage and health benefits," says Tompkins. "But Gen-Xers may value cash more highly - so long as there's flexibility for them to opt into the health plans later."
Consider the whole range of employees - from those just coming in the door to those about to go out.
"Veterans, aged 60 and over, work hard, pay their dues and have a lot of institutional knowledge. The challenge is how to get them to continue past retirement, or how to bring them back after they retire," says Tompkins. Phased retirement, post-retirement contracts and mentoring programs might appeal.
Baby Boomers, aged 40 to 60, are at or nearing the peak of their careers, says Tompkins. "They're asking where they're going to be in 10 to 15 years," he notes.
Giving back to the community is also becoming more important to them. Benefits that might attract this group are paid or unpaid sabbaticals, paid and unpaid time for community work, matching charitable contributions or a shortened work week.
"Employers may initially think this is costly," says Tompkins, but employees of this generation have a strong work ethic and are likely to make up the time elsewhere.
Offering the time "sends a message to the employee - but also sends out a message that the employer cares and has community values."
Gen-Xers aged 26 to 40 "are starting to build their careers now and they want stuff fast. They have a short attention span," says Tompkins.
Employers will retain these employees by appealing to their need for variety and different opportunities. They might appreciate opportunities to job- share, to work from home or help buying a home computer.
Employees who are 25 and under, Gen Y, are just starting out and have many competing opportunities.
"The challenge is to attract them," notes Tompkins. Increasing on-campus recruitment is one means. And talking about the whole package - compensation, paid benefits, lifestyle benefits and company values, is also important.
Appreciating employees begins with communicating with them. Loyalty is affected when people feel out of the loop, says Stern.
He cites examples of an employee who learns about a management grooming plan only after giving notice, and a senior management team criticized by a new CEO for lacking commitment to company goals, when they were never told what the goals were.
"When approached with other opportunities, they'll jump if they don't feel appreciated, recognized or believe they have a future with the organization," says Stern.
And don't forget the value of informal bonuses, such as recognizing when someone has gone the extra mile and needs a day off - with pay.
"Managers who say they can't really do things like that because it will affect productivity don't understand perks like the occasional extra day off result in an employee coming back pumped and more productive," Stern adds.
"If you want individuals who are loyal and supportive and go the extra mile, they have to know what they're supporting. They need to know that their job is important to the overall product and success of the company. Then they'll support the company in good and bad times."
And won't be tempted when someone else offers them a little extra money.
(Sharon Adams can be reached at sharon@businessedge.ca)
