Employee Retention in Tight Times
Murakami, Patricia H., Journal of Property Management
In a market when unemployment was at a record low of 4.2 percent this March, the last thing a manager wants to do is look for good help. It's difficult enough to find anyone to interview, let alone a qualified professional to hire. To avoid the problem, many industries, including property management firms, are examining their compensation and benefits programs to make certain that they are competitive-and maybe even to find out if enhancing benefits might be the key to lock-in the relationship with a valued employee.
In the old days, a traditional merit package that included some form of health insurance and vacation pay was all an employee could-or did-ask for. But times have changed and the pressure has picked up. Employees are asking for, and receiving, inventive packages that fit individual needs and wants. The traditional merit increase, by all industry signs and predictions, may be all but dead in a few years.
In the Chicago Tribune, Sandra O'Neal, a principal at benefits consultants Towers Perrin, noted that we are on the precipice of a very major change" in pay practices. She estimated that in the past two years about 45 large and medium-sized employers in the U.S. have replaced some staffers' standard raises with variable-pay programs.
"Regular merit increases aren't dead. But they are losing their credibility and their effectiveness,' says Jerry McAdams, a national practice leader at consultants Watson Wyatt Worldwide in the same Tribune article. If the merit increase, once viewed as the traditional motivational tool that kept employees striving, is no longer working, what can you do instead?
That depends on whom you talk to and what you read. The greatest struggle appears to be in the chasm that runs between the Fortune 500 company and the rest of us. The former does exhaustive research, searching for trends and patterns while the latter appears to try BandAids like summer hours and bagels on Friday to go with gourmet office coffee in an effort to stave off abandonment. Is there a road in the middle?
The answer is "yes"-but the road is tempered with inventiveness and a willingness to consider the less traditional. The key is to take the research large companies are paying for and make it your own. Still, you can't just steal their ideas and practices, expecting them to work. You need to do your own research with regard to your own management and staff. Start off by asking some basic questions:
What are we really trying to accomplish? (i.e. reduced exit percentages, improved employee morale, increased employee referrals etc.)
What are we willing to give to make this (increased retention and employee involvement, decreased employee dissatisfaction) happen?
What resources (people, dollars, practices) can be counted on to make the change reality?
Without honestly answering these questions, your process cannot move forward. The need to understand where you are willing to bend and what areas are off limits is critical. This understanding will help you begin to think about the options you can potentially offer to employees. Why even consider telecommuting or job sharing or cafeteria benefit plans if it is corp rately verboten or impossible due to the method of work distribution.
There are as wide a variety of options to offer within your programs as there are business types. The key is to offer those that interest your employees. Some points to consider when trying to narrow the offerings:
What are the age groups of your employees? Are they all young and college educated? Are they primarily over 50? If there is a pattern, use it as a factor when considering options.
Are your employees primarily exempt or non-exempt, full-time, or part-time? Hourly or salaried? Current compensation practices will play into the preferred options.
Are there any forms of bonus, incentive, or "exceptional" pay practices currently in place? …