A fifth of UK employees will leave their jobs this year, at enormous cost to industry. Competitive pay helps to keep people, but you need to offer a wider range of incentives if you really want to hold on to good staff, as Vicki Taylor finds out...

Ask any director what their most valuable asset is and most are likely to say it is their employees. Yet CIPD research suggests that, across the UK, private sector companies are tolerating an annual staff turnover of 22%; moreover, Adecco has found that 70% of employees have thought about leaving their job in the past year. This is all good for the recruitment industry, but costly for businesses, as well as potentially damaging to morale and reputation.

Wages are obviously a significant factor in keeping staff and it pays to stay competitive. “Make sure you don’t pay too little below or above the market rate,” stresses Charles Cotton, rewards adviser at the Chartered Institute of Personnel and Development (CIPD). “If you don’t pay enough, employees are likely to feel undervalued and leave.” It is rare for people to leave a job in which they feel valued, however, even if they are offered more money elsewhere. So, wages aside, what other incentives can you offer to show employees you value them – and persuade them to stay with your company?

Alternative benefits

Popular benefits offered to employees include share schemes, pension contributions, gym and healthcare scheme memberships, season-ticket loans, discounts with other businesses and target-linked bonuses. 

According to Cotton, it is best to be careful with bonuses and commission, because a “poorly-designed” scheme can create problems. For example, if commission is based on sales of one particular product or service, employees might push that whether customers need it or not. This in turn can lead to dissatisfied clients and loss of business. 
Your overall package must be seen to be fair, too. For example, if sales people can earn commission, it is wise to find ways to reward non-sales staff. 

Additionally, remember that not everyone is motivated by the same things. It can be beneficial to offer various incentives that people can choose from. “As people progress, different incentives become important,” explains Cotton.

Non-financial incentives

“Giving employees the chance to work flexibly, access to training for career development, providing supportive line managers and giving feedback can be just as important as cash-based motivators,” insists Cotton.

Talk to your staff to find out what they would value, and bear in mind that some incentives, such as childcare voucher schemes, pension contributions and cycle to work schemes, come with tax breaks.

Once you have put a scheme in place, monitor its use and invite feedback from staff about improvements. Keep an eye on your staff turnover rate as well and use your performance monitoring systems (such as staff appraisals) to establish whether there are links between additional incentives and improved performance.

“Look at the organisation’s success as a whole, absenteeism and the number of people applying for and accepting or turning down jobs with your business,” Cotton concludes.  

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