This afternoon the Chancellor, Jeremy Hunt, presented his Autumn Statement. The result of which will produce a much-needed income boost for over 29 million employees and…
As an employer, what can I do to have a strategy in place for effective employee recruitment, retention, retraining and reward?
As an employment tax specialist, it is unsurprising I am regularly asked something that relates to one of the four Rs.
In today’s competitive business landscape attracting, retaining, retraining, and rewarding key employees is crucial for the success and growth of any business or organisation. The UK job market is no exception, with companies continually striving to attract top talent and ensure their workforce remains skilled, engaged, and motivated.
The most common question I am asked is, “How can I, as an employer, pay my employees more, in a tax efficient way?” We have looked at this previously in blogs on the cost of living and tax free expenses and benefits, but I wanted to explore in this blog what employer’s can consider and implement as possible strategies and to highlight the importance of investing in their key employees and their total reward packages.
Retaining staff is so important to the growth of a business. The costs for recruitment and training can be significant. Employee wellbeing affects productivity, safety, and retention. Wellbeing and sickness are being recognised by the Government as an increasing risk to productivity as some employers have reported that 66% of employees felt burnt out in the past six months; 46% of employees feel their employer doesn’t care about their wellbeing; and sick days are at a 10-year high with levels currently at 7.8 days on average per employee.
Employee retention is now the top operational priority for businesses. Time and time again an ambitious, exciting and engaged team has been shown to be the ‘secret ingredient’ to business success.
The first of the four Rs is “recruitment”. Recruiting has become more difficult with the effects of a shrinking labour market and new trends in working practices taking hold.
a) Effective hiring processes:
More of an HR aspect, but employers should streamline their recruitment process to identify the best candidates efficiently. This involves clear job descriptions, targeted advertising, and well-structured interviews to ensure a good fit for both the position and the company culture. You need to shine in what is a competitive market and on many occasions your prospective employee is actually interviewing you!
b) Employee value proposition (EVP):
People are the critical element. Recruiting top talent is a challenge and strategic plans need to be in place to differentiate an employer in the marketplace from other employers, so that they can improve their recruitment performance.
Showcase the unique benefits and opportunities that come with working for your company. An appealing EVP can attract top talent by highlighting career growth, work-life balance, and a positive work environment.
The second of the four Rs is “retention”.
a) Engagement and communication:
Regular communication, employee feedback, and involving employees in decision-making processes can foster a sense of belonging and increase loyalty.
b) Training and development:
Offer opportunities for continuous learning and skill development. Employees are more likely to stay with an organisation that invests in their growth and provides a clear career path.
The third of the four Rs is “retraining”.
a) Identifying skill gaps:
Regularly assess employees’ skills and knowledge to identify gaps and areas for improvement. This helps tailor retraining programmes to meet the evolving needs of the business and the industry.
b) Upskilling and reskilling:
Offer training programs that align with current and future needs, focusing on emerging technologies, industry trends, and evolving job roles.
4. Reward and recognition
The fourth, and final, of the four Rs is “reward” or “recognition”.
a) Competitive compensation and benefits:
Ensure that employee salaries and benefits are competitive within the industry and reflect the employee’s contribution and market rates.
b) Performance-based incentives:
Implement performance-based incentives, bonuses, or profit-sharing schemes to motivate employees and reward exceptional achievements. An enterprise management incentive (EMI) share scheme or similar can be an efficient way to retain employees and engage them in the growth of the business, with tax efficient share options.
c) Recognition programmes:
Establish recognition programmes to appreciate and celebrate employees’ accomplishments, reinforcing a culture of appreciation and fostering a positive work environment. This could be vouchers, bonuses or maybe a staff suggestion scheme.
d) Importance of key employees:
- Drive innovation and productivity:
Key employees often bring unique skill sets and expertise that drive innovation and enhance productivity, contributing to a company’s growth and competitiveness.
- Knowledge retention:
Retaining key employees ensures the preservation of critical institutional knowledge, preventing disruption to operations when experienced individuals leave.
- Enhanced employee morale:
Recognizing and rewarding key employees boosts overall morale and creates a positive work culture, promoting employee satisfaction and motivation.
Investing in the growth and retention of existing key talent is often more cost-effective than recruiting and onboarding new employees, especially considering recruitment and training expenses.
Recruiting, retaining, retraining, and rewarding key employees is essential for a thriving workforce and a successful organisation.
Employers must continuously evolve their strategies to meet the changing needs of the workforce and the market, ensuring a talented and satisfied team that contributes to the company’s long-term success.
Besides the obvious benefits each solution offers, having a top employee benefits package (the total reward package):
- Improves workplace morale
- Reduces stress and associated staff absences
- Boosts productivity
- Helps set the tone for your company’s internal values and ethos
- Reduces staff turnover by helping to retain existing staff
- Makes recruiting top talent easier
The employer needs to think about what the business and the employees want, and these might make up the pillars for the future. They could be team-related (staff events, lunches), work (latest tech and uniforms), individuals (healthcare and wellbeing), growth (development and recognition/reward), flexibility for all and plan for the future with a strong tax efficient pension offering; giving your business and employees long term security.