The loss of key staff can cost a business business millions of pounds. If companies wish to retain their top personnel they will need to offer them packages that promote feelings of achievement and value and ensure there are opportunities for training and personal development.
With the traditional new year job hunt already underway, managers seeking to retain staff should not rely on salary hikes as their only incentive strategy, a leading human resources adviser has warned.
An Accountancy Age survey of 500 finance directors revealed last week that the UK is entering the new year in good economic shape. An emphatic four out of five FDs said they were confident their business would increase its turnover over the next 12 months.
But Marie Fimrite, a director of global career management consultants Drake Beam Morin, warned this week that financial stability could be threatened by the loss of a ‘high performer’. The US Saratoga Institute estimates that losing ten professional staff costs the average company £1m.
She said: ‘The costs involved in failing to keep current employees happy can include lost intellectual property and resources, lost development opportunities, and the costs of recruitment, training and development.’
And Fimrite warned managers that salary was far from the most important reason for an individual to stay with a company. ‘People stay with companies for personal development, challenging work, work climate and pay in that order,’ she said.
‘People tend to stay in jobs where they feel valued as individuals. Fitting in with the company culture, and being able to balance work and home life mattered more to the people interviewed than the amount of money they received.’
But she said there were steps managers could take to keep staff on board.
Both Ernst & Young in the US and Microsoft have retention units while Intel spends $150m – 6% of its pay budget – on an in-house university where staff can both study and teach.
Fimrite added: ‘Employers must recognise the need for compensation plans that help staff balance work and family life. With so many companies willing to match competitors’ financial offerings, the value of money as a recruitment and retention tool is diminishing.
‘To be truly effective, packages must combine financial reward with opportunities to promote feelings of achievement, ownership and involvement.
‘The introduction of hiring and orientation practices that promote cultural fit will also help ensure that new recruits not only possess the skills that are needed but also demonstrate the attitudes, personality traits, and behaviours that ensure organisational fit and promote commitment.’
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